Personal loans of the week

While less flexible than credit cards, personal loans allow you to borrow, repaying a set each month for a fixed period of time.

Rates are near historic lows, and can be much cheaper than 0% credit card deals for some borrowers. The interest rate you’ll pay depends on how much you borrow and how creditworthy you are in the eyes of lenders.

Typically the cheapest loans are for people borrowing between £5,000 and £15,000, though prices vary from between providers. There is a lot of choice for consumers as banks, building societies, motor manufacturers and peer-to-peer lenders all offer personal loans.

Remember the advertised APR is representative, which means lenders only have to offer the advertised rate to 51% of successful applicants. People with a poor credit score might be rejected or offered a loan at a higher rate.

Here’s a round-up of the week’s best headline rates:

£2,500 over 24 months

Metro Bank 5.9% APR
This is the cheapest short-term loan at 5.9% APR representative, but borrowers must be existing customers. Borrowing £2,500 over two years costs £110.69 a month and borrowers will repay £2,657 in total.

Ratesetter 7.2% APR
If you’re not a Metro Bank customer, the best deal comes from Ratesetter. It charges 7.2% for a £2,500 loan over two years. Repayments are £112.16 a month, equivalent to £2,692 overall. This loan is only available online.

£7,500 over 36 months

M&S Bank 2.8% APR
This’ll cost £217.45 per month. Over the course of the loan borrowers will repay £7,828, including interest. The rate is subject to your credit score and some borrowers will be charged more.

TSB 2.8% APR
This is the best pick, offering monthly repayments of £217.45 for 36 months. The total repayable is £7,828 of which £328 represents interest charges.

£10,000 over 48 months

M&S Bank 2.8% APR
This loan will cost borrowers £220.46 a month in repayments. This means over the course of the loan borrowers will repay £10,582.

TSB 2.8% APR
For a four-year personal loan, this offers the lowest rate. Monthly repayments would be £220.46 for 36 months. The total repayable is £10,582.

£20,000 over 72 months

Clydesdale Bank 3% APR
Larger loan rates are also highly competitive, the best coming from Clydesdale Bank. This will charge 3% representative to people borrowing £20,000 over six years. That’ll cost £303.51 per month and £21,853 over the life of the loan. The same loan is also available from Clydesdale's sister brand, Yorkshire Bank.

The AA 3.3% APR
The AA offers a loan of this type at 3.3%. This will cost £306.12 per month, with £22,041 total payable over the term.

Find the best loan for you with Moneywise's loan comparison tool.

Published: 31 July 2015
Last updated: 22 June 2017

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