Many people find themselves in a situation where they have a large expense to cover and not enough time to earn the money to pay for it. Credit cards aren’t for everyone, even if they are usually a better option than high-interest payday loans. The best place to get a loan will depend on how much you want to borrow and what you want to use it for. It also depends on how much time you want them to give you to pay it back. Read this guide on finding loans.
What to Look for When Applying for a Loan
There are some important things that you need to consider when you are looking for a loan provider. Always check their terms and conditions and utilize online eligibility checker tools. Only apply for loans that you are likely to get.
1) Applicant Requirements: Loan providers often have a list of criteria which applicants must fulfil to be eligible for a loan from them. These include your age bracket, employment status and annual income, and good credit history.
2) Secured or Unsecured: Unsecured loans are less risky to undertake, but it may be harder to get one if you have a poor credit rating. With a secured loan, you secure it against an asset. The lender could take it from you if you don’t repay them. Alternatively, you may have better luck if a lender allows you to take out a loan with a guarantor. This is a person with the financial ability to pay who will be responsible for repaying the loan if you don’t, to reassure them.
3) Repayments: Obviously, you are going to look at loans for the amount that you need to borrow. You also need to look at the maximum repayment period for each loan. How much can you afford to repay each month? How long would it take you to pay off the loan, including the added interest over time? Make sure that the loan is affordable.
4) Interest Rates: Lenders make a profit by charging interest on the balance that you borrow until you pay it all back. In extreme cases, you could end up paying twice the amount that you originally borrowed. This wouldn’t make the loan worth it. Look for fixed low interest rates and look out for promotional periods. Be aware that only 51% of applicants will actually get the interest rate as advertised, so yours could end up being higher than that.
5) Extra Fees: Another thing to look out for is additional charges which would ramp up the overall cost of the loan. This includes things like administration or processing fees, late payment charges, and even early repayment fees.
Best Place to Get a Loan for £1,000
When it comes to lending smaller amounts for shorter periods of time, you would probably be better off getting a credit card. These often have extra benefits to make borrowing more worth it. However, it is still possible to get personal loans for amounts as low as £1,000. Interest rates can actually be higher for lower loans, as you are likely to pay them back faster. These are currently the best places to get a loan from if you only want to borrow £1,000:
AA
- Loan Term: 1 year – 3 years
- Representative APR: 13.9% (or 13.8% for AA members)
- Requirements: 21 – 70 years old, permanent UK resident, no CCJs or bankruptcy
- Pros: debt consolidation, lump sum payment, no early repayment fee
- Cons: deferment interest fees, no repayment breaks, daily interest
Nationwide
- Loan Term: 1 year – 5 years
- Representative APR: 13.9%
- Requirements: 18+ years old, permanent UK resident, no CCJs or bankruptcy, must be a Nationwide customer (with a current account, savings, or mortgage)
- Pros: no hidden fees, payment within 2 hours
- Cons: members only, no deferment or holidays, daily interest
Post Office
- Loan Term: 1 year – 3 years
- Representative APR: 13.9%
- Requirements: 21 – 70 years old, permanent UK resident for at least 3 years, no CCJs or bankruptcy, at least £12,000 annual income
- Pros: instant decision, next day transfer, no penalties for overpayment
- Cons: no repayment holidays, early settlement fee
Hitachi
- Loan Term: 2 years – 4 years
- Representative APR: 14.5%
- Requirements: 21+ years old, permanent UK resident for at least 1 year, permanent income, good credit history
- Pros: instant decision, payment within 48 hours, no hidden charges
- Cons: may not offer loans to anyone under 25 years old, daily interest
Tesco Bank
- Loan Term: 1 year – 3 years
- Representative APR: 18.5%
- Requirements: 18 – 74 years old, permanent UK resident for at least 3 years, regular income
- Pros: lump sum payment, debt consolidation, repayment deferment break allowed
- Cons: deferment interest, daily interest, early repayment charge (up to 2 months’ interest)
M&S Bank
- Loan Term: 1 year – 7 years
- Representative APR: 18.6%
- Requirements: 18 – 75 years old, permanent UK resident, at least £10,000 annual income
- Pros: lump sum payment, 3 months deferment, debt consolidation
- Cons: deferment interest, daily interest, no repayment breaks, early repayment charge
Best Place to Get a Loan Under £5,000
Most loan providers expect the lowest amount you’d want to borrow to be between £1,000 and £5,000, to repay over a few years. On average, the following are the best places to get a loan for less than £5,000 at the moment:
Admiral
- Loan Term: 1 year – 5 years
- Representative APR: 8.2%
- Requirements: 18 – 74 years old, permanent UK resident for at least 3 years, minimum annual income of £10,000, no CCJs, IVAs, DROs, or bankruptcy
- Pros: no set-up fees, debt consolidation, payment in 3 working days
- Cons: no repayment holidays, early repayment charge
AA
- Loan Term: 1 year – 5 years
- Representative APR: 8.9% (or 8.8% for AA members)
- Requirements: 21 – 70 years old, permanent UK resident, no CCJs or bankruptcy
- Pros: debt consolidation, lump sum payment, no fee for early repayment
- Cons: daily interest, deferment interest fees, no repayment breaks
Post Office
- Loan Term: 1 year – 5 years
- Representative APR: 8.9%
- Requirements: 21 – 70 years old, permanent UK resident for at least 3 years, no CCJs or bankruptcy, at least £12,000 annual income
Pros: instant decision, next day transfer, no penalties for overpayment
Cons: no repayment holidays, early settlement fee
Nationwide
- Loan Term: 1 year – 5 years
- Representative APR: 9.8%
- Requirements: 18+ years old, permanent UK resident, no CCJs or bankruptcy, must be a Nationwide customer (with a current account, savings account, or mortgage)
- Pros: no hidden fees, payment within 2 hours
- Cons: members only, no deferment or holidays, daily interest
Sainsbury’s Bank
- Loan Term: 1 year – 5 years
- Representative APR: 10.6%
- Requirements: 18 – 80 years old, permanent UK resident for at least 3 years, at least £7,500 annual income, good credit history, Nectar card holder
Pros: debt consolidation, 2 months deferment
Cons: Nectar members only, no repayment holidays, early settlement charges
Tesco Bank
- Loan Term: 1 year – 5 years
- Representative APR: 11.8%
- Requirements: 18 – 74 years old, permanent UK resident for at least 3 years, regular income
- Pros: lump sum payment, debt consolidation, deferment and repayment break allowed
- Cons: deferment interest, daily interest, early repayment charge (up to 2 months’ interest)
Best Place to Get a Loan Over £5,000
Expenses such as weddings or other celebration events, going on a big family holiday, or getting a new car can require a larger chunk of money upfront. For loans of more than £5,000, these are the best places for you to go:
Admiral
- Loan Term: 1 year – 5 years
- Representative APR: 3.4%
- Requirements: 18 – 74 years old, permanent UK resident for at least 3 years, annual income of at least £10,000, no CCJs/IVAs/DROs/bankruptcies
- Pros: no set-up fees, debt consolidation, payment within 3 working days
- Cons: no repayment breaks, early repayment fee
Hitachi
- Loan Term: 2 years – 5 years
- Representative APR: 3.5%
- Requirements: 21+ years old, permanent UK resident for at least 1 year, permanent income, good credit rating
- Pros: instant decision, payment within 48 hours, no hidden charges
- Cons: may not offer loans to anyone under 25, daily interest
Tesco Bank
- Loan Term: 1 year – 5 years
- Representative APR: 3.5%
- Requirements: 18 – 74 years old, permanent UK resident for at least 3 years, steady income
- Pros: lump sum payment, debt consolidation, deferment and repayment break
- Cons: deferment interest, daily interest, early repayment fee (up to 2 months of interest)
Nationwide
- Loan Term: 1 year – 5 years
- Representative APR: 3.6%
- Requirements: 18+ years old, permanent UK resident, good credit history, must be a Nationwide customer (current account, savings account, or mortgage)
- Pros: no hidden fees, payment within 2 hours
- Cons: members only, no deferment, no breaks, daily interest
M&S Bank
- Loan Term: 1 year – 7 years
- Representative APR: 3.6%
- Requirements: 18 – 75 years old, permanent UK resident, annual income of £10,000
- Pros: lump sum payment, 3 months deferment, debt consolidation
- Cons: deferment interest, daily interest, no holidays, early repayment fee
Sainsbury’s Bank
- Loan Term: 1 year – 5 years
- Representative APR: 3.6%
- Requirements: 18 – 80 years old, permanent UK resident for at least 3 years, gross annual income of at least £7,500, no CCJs or bankruptcy
Pros: debt consolidation, 2 months deferment
Cons: no repayment holidays, early settlement fee
Best Place to Get a Loan Over £7,500
The loan amount at which many providers begin to offer their lowest interest rates is £7,500. You will have the benefit of a larger loan with a lower interest rate, at the best available intersection. Here are some possible loans.
Admiral
- Loan Term: 1 year – 5 years
- Representative APR: 2.9%
- Requirements: 18 – 74 years old, permanent UK resident (at least 3 years), annual income of £10,000, no CCJ/IVA/DRO/bankruptcy
- Pros: no set-up fees, debt consolidation, payment within 3 working days
- Cons: no repayment breaks, early repayment fee
M&S Bank
- Loan Term: 1 year – 7 years
- Representative APR: 2.9%
- Requirements: 18 – 75 years old, permanent UK resident, annual income of at least £10,000
- Pros: lump sum payment, debt consolidation, 3 months deferment
- Cons: deferment interest, daily interest, no repayment breaks, early repayment fee
Sainsbury’s Bank
- Loan Term: 1 year – 5 years
- Representative APR: 2.9%
- Requirements: 18 – 80 years old, permanent UK resident for 3 years, annual income at least £7,500, no CCJs or bankruptcy
Pros: debt consolidation, 2 months deferment
Cons: no repayment holidays, early repayment fee
Tesco Bank
- Loan Term: 1 year – 5 years
- Representative APR: 3%
- Requirements: 18 – 74 years old, permanent UK residency for at least 3 years, reliable income
- Pros: lump sum payment, debt consolidation, deferment, repayment break
- Cons: deferment interest, daily interest, fee for early repayment (up to 2 months of interest)
Nationwide
- Loan Term: 1 year – 5 years
- Representative APR: 3%
- Requirements: 18+ years old, permanent UK residency, good credit score, must be a Nationwide customer (holding a current account, savings account, or mortgage)
- Pros: no unexpected fees, payment within 2 hours
- Cons: members only, no deferment or payment breaks, daily interest
AA
- Loan Term: 1 year – 7 years
- Representative APR: 3.1% (lower for members)
- Requirements: 21 – 70 years old, permanent UK residency, no CCJs, no bankruptcies
- Pros: debt consolidation, lump sum payment, no fee for early repayment
- Cons: daily interest, interest fees charged on deferment, no breaks from repayments
Best Place to Get a Loan Over £10,000
Many lenders offer maximum loans of between £15,000 and £25,000, with longer repayment terms for these higher balances. However, the interest rates do not tend to get any lower, so you will probably still end up paying a lot of it.
Admiral
- Loan Term: 1 year – 5 years
- Representative APR: 2.9%
- Requirements: 18 – 74 years old, permanent UK resident for at least 3 years, income of at least £10,000 annually, no CCJs, IVAs, or bankruptcies
- Pros: debt consolidation, no set-up fees, payment within 3 working days
- Cons: no repayment breaks, early repayment charge
John Lewis Finance
- Loan Term: 1 year – 5 years
- Representative APR: 2.9%
- Requirements: 18+ years old, permanent UK resident with a UK bank account, gross income of at least £10,000 a year
- Pros: payment within 3 days, no early repayment fee, annual repayment holiday
- Cons: must choose payment holiday month during application stage, still charge interest during payment holiday
Sainsbury’s Bank
- Loan Term: 1 year – 5 years
- Representative APR: 2.9%
- Requirements: 18 – 80 years old, permanent UK resident, income at least £7,500 per year, no CCJs or bankruptcy
Pros: debt consolidation, 2 months deferment
Cons: no repayment breaks, early settlement fee
M&S Bank
- Loan Term: 1 year – 7 years
- Representative APR: 2.9%
- Requirements: 18 – 75 years old, permanent UK resident, annual income at £10,000
- Pros: lump sum payment, debt consolidation, 3 months deferment
- Cons: deferment interest, daily interest, no repayment holidays, early repayment charge
Yorkshire Bank
- Loan Term: 1 year – 7 years
- Representative APR: 3%
- Requirements: 18+ years old, permanent UK address, debit or credit card with a UK bank account, good credit history
- Pros: debt consolidation, payment as soon as next business day
- Cons: early repayment fee of up to 58 days’ interest
Tesco Bank
- Loan Term: 1 year – 5 years
- Representative APR: 3%
- Requirements: 18 – 74 years old, permanent UK resident for 3 years or more, regular income
- Pros: debt consolidation, lump sum payment, deferment and repayment holiday
- Cons: deferment interest, daily interest, early settlement charge (up to 2 months of interest)
