The best way to find a low interest loan is to shop around and find the best rates using this comparison.

Look for a loan with the lowest representative APR. This is the interest rate lenders have to advertise on their loans, and must give to at least 51% of people who apply.

Banks and building societies may not offer the cheapest loans, so compare all your options before you apply.

Other things to watch out for

While the interest rate tells you how much the loan costs there is more to choosing the right loan than just picking the lowest interest rate:

Get the right type of loan

There are lots of different types of loans but they are all either secured or unsecured.

  • Unsecured loans do not use your belongings, you just borrow the money from the lender and they have no direct claim on your property. They are sometimes called personal loans.

  • Secured loans are linked to something you own, and if you do not pay back the loan the lender can sell it to get their money back.

Choosing the right type is important because they have different risks and benefits. For example, secured loans may allow you to borrow larger sums but also put your property directly at risk.

Choose the right loan term

You may be able to get a lower interest rate by choosing a longer loan term, but this does not always mean the loan will be cheaper.

While taking longer to pay your loan will make your monthly payments lower you will also be paying interest for longer, so the loan could cost you more overall.

Choose the shortest loan term that keeps your monthly payments affordable.

Low interest loan FAQs

Q

What does APR mean?

A

It stands for annual percentage rate, which is the interest you pay on the total value of your loan. The lower your APR, the lower your monthly payments.

Q

Is the interest rate fixed?

A

All the unsecured loans in this comparison offer fixed interest rates so the amount you pay will stay the same.

Q

How long does it take to apply online?

A

Applying online can take minutes if you have your details ready. Some secured loans take longer as the lender will need to value your property.

Q

Can I still get a loan with bad credit?

A

Yes, but because the lender only has to offer their advertised interest rate to 51% of borrowers, if you have bad credit, they can charge you more.

About our loans comparison

Q

Who do we include in this comparison?

A

We include every unsecured loan you can get in the UK and peer to peer loans from our panel. They are all from lenders regulated by the Financial Conduct Authority. Here is more information about how our website works.

Q

How do we make money from our comparison?

A

We have commercial agreements with some of the companies in this comparison and get paid commission if we help you take out one of their products or services. Find out more here.
You do not pay any extra and the deal you get is not affected.