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Compare Low Interest Loans From UK Leading Providers

A loan can be handy to spread the cost of purchases, or if you have a sudden need for extra cash. A low interest loan helps to keep your borrowing more affordable.

  • Apply in minutes
  • Repay over one to seven years
  • From 2.8% representative APR
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Compare low interest loans from top providers

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See the interest rate you’re eligible for before you apply

With real interest rates you'll see exactly how much you’ll need to pay each month. And which lenders will pre-approve your application before you apply.

How it works

1

Check your eligibility

Answer a few quick questions. This will not impact your credit score.

2

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See the exact amount you’ll need to pay each month – no estimates.

3

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Low interest loans deals

We are classed as a credit broker for consumer credit, not a lender. Our services are provided at no cost to you. We may receive a commission from the companies we refer you to, but this does not affect what you will pay for the product you choose.

6 results found, sorted by lowest representative apr. How we order our comparisons.
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AA Personal Loan Ex/C Member
Loan amount
£1,000 to £25,000
Representative APR
2.8% APR (£15,001 to £25,000)
Loan term
1 year to 7 years
Personal loan with 12 months breakdown cover at no extra cost, existing AA members are entitled to an add-on at no extra cost.
Available to existing customers only.
Representative Example: Representative 8.2% APR fixed. Based on a loan of £4,000 for 36 months at 8.2% p.a. Total £4,506.12 repayable at £125.17 per month.
Eligibility
UK Resident
Minimum Age21 years
Minimum Income£12,000
Credit Rating Acceptedgood
AA Personal Loan
Loan amount
£1,000 to £25,000
Representative APR
2.9% APR (£15,001 to £25,000)
Loan term
1 year to 7 years
Personal loan with 12 months breakdown cover at no extra cost, existing AA members are entitled to an add-on at no extra cost.
Representative Example: The representative rate is 3.0% APR (fixed) so if you borrow £17,500 over 60 months at a rate of 3.0% p.a. (fixed) you will repay £314.14 per month & £18,847.80 in total.
Eligibility
UK Resident
Minimum Age21 years
Minimum Income£12,000
Credit Rating Acceptedgood
Monevo Personal Loan
Loan amount
£1,000 to £35,000
Representative APR
10.6% APR (£15,000 to £19,999)
Loan term
1 year to 5 years
Monevo is a credit broker and not a lender.
Representative Example: The representative rate is 10.6% APR (fixed) so if you borrow £15,000 over 5 years at a rate of 10.6% p.a (fixed) you will repay £319.57 per month and £19,174.37 in total.
Eligibility
UK Resident
Maximum AgeUnlimited
Minimum Age18 years
Minimum Income£7,000
Credit Rating Acceptedpoor

Powered by Monevo to show you real rates

Your personalised bad credit loan results are powered by Monevo. They make sure you only see real interest rates. Not just estimates like some lenders show you.

What is a low interest loan?

A low interest loan is one that offers a low rate of interest, which makes borrowing more affordable.

If the interest rate is low, you will have lower monthly payments and pay less in interest overall.

There are a lot of factors that go into getting low interest loans. The APR you are offered will depend on things such as:

  • How much you want to borrow

  • Your income and and financial history

  • Your credit score — the better your rating, the better your chances of qualifying for the cheapest loans

  • The lowest rate offered to you may be lower than the rate advertised

To get a low interest loan, you most likely require a a strong credit score, along with a good credit history.

Loan illustration

If you want to get a low interest loan, but your credit is less than ideal, it might be a good idea to take steps to improve your credit score before applying.

Types of low interest loan

All loans fall into fall into basic two categories: unsecured loans and secured loans.

Secured loans

These loans are linked to something you own – usually your home. If you can’t pay the loan back, the lender could force you to sell your home to get their money back. You can usually borrow more with a secured loan, but it does put your home at risk.

Unsecured loans

These loans aren’t secured against your belongings. You just borrow the money and pay it back. This means that if you fail to pay the money back, your lender can’t get their hands on your property. You might hear these also called called personal loans.

Finding a low interest loan

As with most loans, your credit score will be a major factor in the interest you qualify for. The best loan rates are usually only offered to those who have good credit score.

Good credit scores lead to lower rates, and give you a better chance of getting the cheapest loans.

If you have bad credit, it'll be difficult to get a low interest loan. But it's still possible to get a bad credit loan.

There may be fewer providers willing to offer you a loan, and those who do will offer higher interest rates than you'd get with a standard loan, and you'll likely be limited to how much you can borrow.

You could also try to get a guarantor loan. That’s when someone – often a family member – guarantees to make your repayments if you can’t.

Paying off low interest personal loans

You should always try to prioritise paying off a loan as quickly as your finances allow you to. Missing payments can be very damaging to your credit score, while a long term can be expensive.

The longer your loan term, the less you will be paying every month, but you will end up paying more in interest overall.

Let's say you borrow £3,000 at an interest rate of 9%. Here's how your repayments and over all cost of borrowing will change depending on the loan term¹:

Loan term (yrs)Monthly PaymentTotal interest
1£261.9£142.4
2£136.6£277.7
3£94.9 £416.8
5£61.8 £705.6
7£47.7 £1,009.3

What to consider when looking for low APR loans

There’s a lot more to choosing the right loan than just finding loans with low APR.

Some things you should look out for include:

  • The length of the repayment period or term

  • Whether your interest rate is fixed or variable

  • Whether you can afford the monthly payment

  • How much you'd repay overall, including fees

Comparing different types of loan

Comparing low interest loans

The most important number to consider when you take out a loan is the rate of interest. Shown as APR, this is the percentage amount your total debt will increase by each year.

As you can see from this graph, even a very small change in the APR can impact how much interest you pay. The longer it takes you to pay off your debt, the more interest you will pay.

We looked at repaying a loan of £10,000 with monthly repayments of £200.

Alternatives to low interest loans

Low interest loans are not always the best option. If you’re only borrowing a small amount – less than £5,000 – you might find that a credit card is better.

Your ability to do this will depend on your credit limit. Only people with good incomes and a decent credit score can borrow as much as £5,000 on a credit card. But, if that sounds like you, you might be able to get a credit card that gives you 0% interest on purchases.

If you think you’re organised and disciplined enough to pay off your credit card balance within the 0% interest period it could be the best way to borrow. Different credit cards come with different 0% periods – up to as much as 29 months. Alternatively, you could do a balance transfer to another 0% credit card when the 0% period ends.

"The cheapest way to borrow is to pay as little interest as you can. A low interest loan can be a great way to do this.

"However, make sure you know what extra fees your loan comes with – so you don't end up paying more in other areas."

Managing debt

If your level of debt begins to feel unmanageable, you should talk to your lenders as soon as possible. They may have schemes in place to help you, such as adjusting your repayment schedule to lower monthly costs.

You could also turn to debt charities such as Citizen's Advice, StepChange and National Debtline. They offer free support and advice to anyone struggling with debt². They can help you make a structured plan to repay your creditors and get out of debt.

How much money can you borrow?

Typically, you can get some competitive rates for personal loans of up to £15,000. Interest rates for loans above that and up to £25,000 can be a bit more expensive.

How much a lender is willing to lend you is largely depended on on your income and overall financial history.

Will I always get the representative APR?

No, you won’t necessarily get the representative APR. The representative APR is what at least 51% of applicants for the loan are offered.

The only way to find out for sure what APR you’ll be offered is to apply for the loan.

Can I pay off my low interest loan early?

Yes, you can. You might have to pay a penalty, so check the terms of the loan.

There’s also an option to make overpayments of up to £8,000 per year without paying any fees. Overpayments of more than £8,000 across the year might incur a cost.

Low interest loan FAQs

Explore loans guides

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Finding the best loan is not just about getting the cheapest rate, you need to pick between a secured and unsecured loan too. Here is how they work and how to choose the right one.

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It is a record of your financial history, including details of when you have borrowed money and the repayments you have made. Here is what else it shows.

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Why compare loans deals with money.co.uk?

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¹Calculations made by Money.co.uk and correct as of the date shown.

²StepChangeNational Debtline and Citizen's Advice are among the UK's leading debt charities, providing free expert debt advice to help you get out of debt.

Last updated: 13 September 2021