There are many reasons to take out a personal loan. You could be looking to do up the house, get a new car or consolidate existing debts.
While less flexible than credit cards, personal loans allow you to borrow, repaying a set amount each month for a fixed period of time. The interest rate you pay depends on how much you borrow and how creditworthy you are in the eyes of lenders.
Remember the advertised rates are representative, which means lenders only have to offer this rate to 51% of successful applicants. People with a poor credit score might be rejected or offered a loan at a higher rate.
Each week we highlight our Moneywise Best Buys, which pick out the best personal loans available.
£2,500 over 24 months
Metro Bank Personal Loan 7.9%
This is the cheapest short-term loan at 5.9%, but borrowers must be existing customers. Borrowing £2,500 over two years costs £112.95 a month and borrowers will repay £2,711 in total. You can apply by telephone or in a Metro Bank branch, which are located across London and the South East of England.
Rate Setter 11.9%
This loan comes with a representative APR of 11.9% if you borrow £2,500. This means monthly repayments will be £117.57 for a total repayment of £2,822.
Lending Works 12.62%
Lending Works charges 12.62% for a £2,500 loan over two years. Repayments are £118.41 a month, equivalent to £2,842 overall.
£15,000 over 60 months
Sainsbury's Bank Personal Loan (Nectar Card) 2.8%
This loan from Sainsbury's Bank charges 2.9%, meaning repayments of £268.20 for a total repayment of £16,132 over 60 months. However, if you borrow £15,001 the rate goes up to 2.9% adding extra costs to the total repayments. Note also, to access this rate you must have a Nectar card, otherwise the borrowing costs are higher.
John Lewis Personal Loan 2.9%
This will cost £268.20 per month, with £16,132 total payable over the term. This loan is available online and over the phone.
Yorkshire Bank Personal Loan 2.9%
Repayments are £268.86 per month with £16,132 payable over the course of the loan. Also available from sister brand Clydesdale Bank.
M&S Bank Personal Loan 2.9%
Larger loan rates are also highly competitive, the best coming from M&S Bank. It charges 2.9% for a five-year loan, with repayments costing £268.86 per month. This will cost you a total of £16,132.
How are Moneywise Best Buys selected?
We look across as much of the market as possible to find the best deals using industry data from Defaqto.
All our picks are nationally available - online, by post or by phone. We try and pick products that are available to both new and existing customers, but we’ll highlight some offers for existing customers if they’re much better than what else is on offer.
We select loans which charge the lowest APR - the annual percentage rate.
We reserve the right to use our discretion at all times.