Comparing loan offers from different providers will help you find the lowest interest rate personal loan. Interest rates on personal loans are influenced by the Bank of England base rate, but also by competition between lenders. This means that the provider offering the personal loan with the lowest interest rate can change frequently. The tables below are updated regularly to keep up with market shifts and lender adjustments. In this article we also include all the information you need to find the lowest interest rate personal loan, learn the key facts about personal loans and understand what your borrowing will cost.
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Compare lowest interest rate personal loans - October 2024
We have used the representative examples of repaying a £1,000 loan over three years, a £5,000 loan repaid over five years, a £10,000 loan repaid over five years and repaying a £20,000 loan over five years to source the figures in this table. This is to show that borrowing more or less money may change the advertised rate of interest, as will altering the loan term. It is also important to remember that the loan amount and rate you are ultimately offered will be based on your specific credit history and financial circumstances, so may differ from the representative APR you see here.
The best rates on a £1,000 loan
| Loan provider | Representative APR (from) | Available loan term | Available loan amount | Monthly payment | Eligibility checker? |
| Santander | 13.5% | 1 - 5 years | £1,000 - £25,000 | £33.56 | No |
| M&S Bank | 14.9% | 1 - 7 years | £1,000 - £25,000 | £34.16 | Yes |
| AIB (NI)¹ | 16.4% | 1 - 5 years | £1,000 - £25,000 | £35.01 | No |
| HSBC | 16.9% | 1 - 5 years | £1,000 - £25,000 | £35.02 | No |
| Zopa | 22.9% | 1 - 5 years | £1,000 - £25,000 | £37.57 | Yes |
| TSB | 27.9% | 1 - 7 years | £300 - £50,000 | £39.69 | No |
| Halifax | 29.7% | 1 - 7 years | £1,000 - £50,000 | £40.44 | Yes |
Representative APR is based on a 3-year loan term
¹You must be an existing personal current account customer with AIB (NI) and registered for Online Services
The best rates on a £5,000 loan
| Loan provider | Representative APR (from) | Available loan term | Available loan amount | Monthly payment | Eligibility checker? |
| Tesco Bank | 7.2%¹ | 1 - 10 years | £1,000 - £35,000 | £98.94 | Yes |
| Santander | 7.2% | 1 - 5 years | £1,000 - £25,000 | £98.94 | No |
| M&S Bank | 7.4% | 1 - 7 years | £1,000 - £25,000 | £99.38 | Yes |
| AIB (NI)² | 7.9% | 1 - 5 years | £1,000 - £25,000 | £100.83 | No |
| HSBC | 9.9% | 1 - 5 years | £1,000 - £25,000 | £104.95 | No |
| TSB | 11.9% | 1 - 7 years | £300 - £50,000 | £109.45 | No |
| Halifax | 17.9% | 1 - 7 years | £1,000 - £50,000 | £123.14 | Yes |
| Zopa | 22.9% | 1 - 5 years | £1,000 - £25,000 | £187.68 | Yes |
Representative APR is based on a 5-year loan term
¹Clubcard members receive a preferential rate, non-members will get from 7.9% and pay £100.49 a month
²You must be an existing personal current account customer with AIB (NI) and registered for Online Services
The best rates on a £10,000 loan
| Loan provider | Representative APR (from) | Available loan term | Available loan amount | Monthly payment | Eligibility checker? |
| Tesco Bank | 6.1%¹ | 1 - 10 years | £1,000 - £35,000 | £193.02 | Yes |
| TSB | 6.2% | 1 - 7 years | £300 - £50,000 | £193.47 | No |
| Santander | 6.2% | 1 - 5 years | £1,000 - £25,000 | £193.47 | No |
| M&S Bank | 6.2% | 1 - 7 years | £1,000 - £25,000 | £193.47 | Yes |
| Halifax | 6.6% | 1 - 7 years | £1,000 - £50,000 | £195.23 | Yes |
| HSBC | 6.6% | 1 - 5 years | £1,000 - £25,000 | £195.23 | No |
| AIB (NI)² | 7.1% | 1 - 5 years | £1,000 - £25,000 | £197.85 | No |
| Zopa | 22.9% | 1 - 5 years | £1,000 - £25,000 | £269.40 | Yes |
Representative APR is based on a 5-year loan term
¹Clubcard members receive a preferential rate, non-members will get from 6.5% with monthly repayments from £194.79
²You must be an existing personal current account customer with AIB (NI) and registered for Online Services
The best rates on a £20,000 loan
| Loan provider | Representative APR (five-year term) | Available loan term | Available loan amount | Monthly payment | Eligibility checker? |
| Tesco Bank | 6.1%¹ | 1 - 10 years | £1,000 - £35,000 | £386.05 | Yes |
| TSB | 6.2% | 1 - 7 years | £300 - £50,000 | £386.94 | No |
| M&S Bank | 6.2% | 1 - 7 years | £1,000 - £25,000 | £386.93 | Yes |
| Santander | 6.4% | 1 - 5 years | £1,000 - £25,000 | £388.70 | No |
| Halifax | 6.6% | 1 - 7 years | £1,000 - £50,000 | £390.47 | Yes |
| AIB (NI)² | 7.1% | 1 - 5 years | £1,000 - £25,000 | £395.69 | No |
| HSBC | 7.4% | 1 - 5 years | £1,000 - £25,000 | £397.54 | No |
| Zopa | 22.9% | 1 - 5 years | £1,000 - £25,000 | £538.80 | Yes |
Representative APR is based on a 5-year loan term
¹Clubcard members receive a preferential rate, non-members will get from 6.5% with monthly payments from £389.58
²You must be an existing personal current account customer with AIB (NI) and registered for Online Services
The key figures in the lowest interest rate personal loans
| Key figure | What it means |
| APR (annual percentage rate) | This is the cost of borrowing the money in the first year and broadly defines which deal is the lowest interest rate personal loan. It includes the interest you are being charged and any standard fees charged by the lender. |
| Representative APR | This is the APR that the lender expects at least 51% of successful applicants to be offered. You may ultimately get a higher or lower figure, but it is a useful way to compare providers at the start of your comparison. |
| Loan amount | This is the amount of money you are borrowing. Most of the unsecured loan providers featured in this article will lend between £1,000 and £25,000. Some people may be able to borrow much more, while others may not be offered the full amount they want. |
| Loan term | The period of time you are borrowing the money for. Most lenders in this article offer between one and seven years to repay your loan, but longer terms may be available. |
| Loan fees | This is what you will be charged in addition to repaying what you have borrowed. Fees will vary between lenders, so it is important to check before you apply. |
| Early repayment charge | This is an extra charge some lenders add on if you try to repay your loan in full before the end of the term. |
| Credit score | This is a numerical rating of how reliable or trustworthy a borrower you are, based on your credit history. A low credit score can lead to your loan application being rejected. A high score is usually a good sign that you will be offered the best rates. Read our top tips to improve your credit score before you apply. |
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How to choose the lowest interest rate personal loan
This may seem pretty simple – just pick the deal with the lowest APR – but interest rates can fluctuate over time and vary depending on your loan amount and loan term. Finding the lowest interest rate personal loan is a great first step in your comparison, but you should also explore how changing the loan amount or term could make your borrowing more or less expensive.
This process should also involve looking at a wide range of lenders so that you can get an accurate picture of what a good deal looks like. It is tough to judge an APR figure out of context without seeing what other lenders are offering for the same terms.
How to compare personal loan amounts
How much you want to borrow will play a big part in what the lowest interest rate personal loan looks like for you. Our comparison tables show that most major providers will lend between £1,000 and £25,000. They also show that interest rates can vary significantly within that range.
Keep in mind that some lenders will offer more than £25,000 or less than £1,000, with exactly how much you can borrow based on your credit history, financial circumstances and chosen repayment period you choose. Lenders should only agree to an amount you can afford to repay, but it is also important to consider what you can afford and budget for the monthly repayments. Even if borrowing a bit more gives you a lower interest rate, it is wise to stick to what you need. The additional cash may only increase your monthly payments slightly if combined with a lower rate, but it could make a hefty difference to what you pay overall.
How to find the best loan for you
Comparing different loans is a key part of getting the best deal for you. Money to the Masses has made this process easier by partnering with Creditec*, an online comparison service. Instead of trawling through countless different provider websites hunting for the best deal, Creditec’s personalised search results will show you the key details you need to know, all in one place. If you are eligible, your tailored list will feature the loans that you are more likely to be accepted for, cutting down the chance of any applications you make being rejected should you go on to complete a full application with the provider. Your search results are built using a soft credit search, so there will be no damage to your credit score. Click on this link to get started*. If you are not eligible for a loan with any of the providers on the panel then you may be shown a variety of alternative products that may be suitable for you. You are under no obligation to continue with them if you feel they are not suitable for your circumstances.
What can I use the lowest interest rate personal loan for?
Personal loans can be used for most things, with a few important exceptions. The table below explains what a personal can and can't be used for.
| Can use a personal loan | Cannot use a personal loan |
| Home improvements | Starting a business |
| Home repairs | A house deposit |
| Energy efficiency improvements | Investments |
| Debt consolidation | Household bills |
| A car | Everyday spending |
| A big purchase | Higher education |
| A wedding | A gift |
| A holiday | Gambling |
We go over the details in our article 'What can you use a personal loan for?'.
Pros and cons of the lowest interest rate personal loan
These are the basic advantages and disadvantages of borrowing that you should know before you start your personal loan journey.
Pros of the lowest interest rate personal loan
- Spread the cost of a big purchase over a long period of time
- Borrow with less risk to your valuable assets (compared to a secured loan)
- Know how much you need to pay each month for the duration of the loan term
- Borrow at a lower long-term interest rate than if you used a credit card (though many credit cards offer long interest-free periods)
- Widely available from a host of different providers
- In most cases you can repay the debt early, though some providers may charge a fee
- The application process is usually quick and the money paid out soon after
Cons of the lowest interest rate personal loan
- Borrowing smaller sums at an affordable rate can be difficult
- The maximum amount you can borrow is usually less than with a secured loan
- Your credit score will suffer if you miss repayments, which can make borrowing more difficult in the future
- Applicants with low credit score will struggle to borrow at a reasonable rate of interest
Alternatives to the lowest interest rate personal loan
There are many different ways to borrow money and a personal loan will not be the best option for everyone. Here are some alternative options to consider:
Secured loan
A secured loan requires an asset – usually your home – as security, which means it could be sold to clear the debt if you cannot repay what you owe. However, you may be able to access much higher loan amounts and lower interest rates than if you took out an unsecured personal loan. Read our article ‘Secured vs unsecured loans: Making the right choice’ to learn more.
Credit card
Using a credit card to borrow money is more flexible than taking out a loan. You only need to pay back what you spend and you can save with 0% interest options, rewards cards and credit cards that can help you build credit. You can also access cash using money transfer credit cards.
Remortgaging
You could remortgage to borrow more money against your home. This is a common way to raise funds for home improvements, though it will increase what you owe on your mortgage.
Car finance
You may find that specialist car finance is an easier option than taking out a loan to pay for a car. There are lots of ways to fund a new vehicle, so read our article ‘Buying a car: what are the best finance options?’ for more information.
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