Best personal loan rates 2024 - Which? (2024)

If you want to borrow a lump sum of money to help pay for a new car or home improvements, an unsecured personal loan might be a suitable option.

Typically personal loans allow you to borrow from £1,000 up to £50,000 over periods of one to 10 years. The most competitive rates at the moment are on medium-sized loans (£7,500-£15,000).

Here, we reveal which loan providers are offering the best rates on borrowing £5,000, £10,000, £15,000 and £25,000.

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Best £5,000 loans over three years

The table shows the best deals available for a £5,000 loan paid back over three years.

Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms and conditions of a personal loan provider before committing to any financial products.

ProviderRepresentative APR %*Monthly repaymentTotal amount payableRepresentative example
Tesco Bank (available to Clubcard holders)7.3%£154.53

£5,563.08

The table shows the monthly repayment and total cost of a £5,000 loan taken out over three years at a fixed rate of 7.3% APR representative.
Sainsbury's Bank (available to Nectar cardholders)7.3%£154.54£5,563.44The table shows the monthly repayment and total cost of a £5,000 loan taken out over three years at a fixed rate of 7.3% APR representative.
Santander7.4%£154.75
£5,571.00The table shows the monthly repayment and total cost of a £5,000 loan taken out over three years at a fixed rate of 7.4% APR representative.

Table notes: table last updated 4 January 2024. The table shows the monthly repayment and total cost of a £5,000 loan taken out over three years. *APR is subject to change based on individual circ*mstances and the representative APR may not be what you receive.

Best £10,000 loans over five years

The table shows the best deals for personal loans of £10,000 paid back over five years.

Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms and conditions of a personal loan provider before committing to any financial products.

ProviderRepresentative APR %*Monthly repaymentTotal amount payableRepresentative example
Tesco Bank (available to Clubcard holders)6.1%£193.02 £11,581.20
The table shows the monthly repayment and total cost of a £10,000 loan taken out over five years at a fixed rate of 6.1% APR representative.
Sainsbury's Bank (available to Nectar cardholders)
6.2%£193.47
£11,608.20
The table shows the monthly repayment and total cost of a £10,000 loan taken out over five years at a fixed rate of 6.2% APR representative.
Santander6.3%£193.91
£11,634.60
The table shows the monthly repayment and total cost of a £10,000 loan taken out over five years at a fixed rate of 6.3% APR representative.
Halifax6.6%£193.23£11,713.80
The table shows the monthly repayment and total cost of a £10,000 loan taken out over five years at a fixed rate of 6.6% APR representative.
M&S Bank6.6%£195.23£11,713.80
The table shows the monthly repayment and total cost of a £10,000 loan taken out over five years at a fixed rate of 6.6% APR representative.

Table notes: table last updated 4 January 2024. The table shows the monthly repayment and total cost of a £10,000 loan taken out over five years . *APR is subject to change based on individual circ*mstances and the representative APR may not be what you receive.

Best £15,000 loans over five years

The table below shows the best deals for personal loans of £15,000, paid back over five years.

Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms and conditions of a personal loan provider before committing to any financial products.

ProviderRepresentative APR %*Monthly repaymentTotal amount payableRepresentative example
Tesco Bank (available to Clubcard holders)6.1%.£289.54
£17,372.40
The table shows the monthly repayment and total cost of a £15,000 loan taken out over five years at a fixed rate of 6.1% APR representative.
Sainsbury's Bank (available to Nectar cardholders)
6.2%£290.20
£17,412.00
The table shows the monthly repayment and total cost of a £15,000 loan taken out over five years at a fixed rate of 6.2% APR representative.
Santander
6.3%£290.86
£17,451.60
The table shows the monthly repayment and total cost of a £15,000 loan taken out over five years at a fixed rate of 6.3% APR representative
Halifax
6.6%£292.85
£17,571.00
The table shows the monthly repayment and total cost of a £15,000 loan taken out over five years at a fixed rate of 6.6% APR representative
M&S Bank6.6%£292.85
£17,571.00
The table shows the monthly repayment and total cost of a £15,000 loan taken out over five years at a fixed rate of 6.6% APR representative

Table notes: table last updated 4 January 2024. The table shows the monthly repayment and total cost of a £15,000 loan taken out over five years. *APR is subject to change based on individual circ*mstances and the representative APR may not be what you receive.

£25,000 loans over five years

The table below shows the best deals for personal loans of £25,000, paid back over five years.

Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms and conditions of a personal loan provider before committing to any financial products.

ProviderRepresentative APR %*Monthly repaymentTotal amount payableRepresentative example
Tesco Bank (available to Clubcard customers)6.1%£482.57
£28,954.20
The table shows the monthly repayment and total cost of a £25,000 loan taken out over five years at a fixed rate of 6.1% APR representative.
Sainsbury's Bank (available to Nectar cardholders)
6.3%£484.78
£29,086.80
The table shows the monthly repayment and total cost of a £25,000 loan taken out over five years at a fixed rate of 6.3% APR representative.
Santander6.4%£485.88
£29,152.80
The table shows the monthly repayment and total cost of a £25,000 loan taken out over five years at a fixed rate of 6.4% APR representative.
Halifax6.6%£488.08
£29,284.80
The table shows the monthly repayment and total cost of a £25,000 loan taken out over five years at a fixed rate of 6.6% APR representative.

Table notes: table last updated 4 January 2024. The table shows the monthly repayment and total cost of a £25,000 loan taken out over five years. *APR is subject to change based on individual circ*mstances and the representative APR may not be what you receive.

How we choose the best rate personal loans

All the loan providers listed by Which? are signed up to the Lending Code, which sets the minimum standards for the way banks, building societies and other providers should treat their customers.

These loans are widely available across the UK, and consumers do not need to own any other financial products from an institution to qualify for them.

All of the loan providers featured in our tables use risk-based pricing to determine what interest rates their customers get. This means you might not end up with the same rate as the one you saw advertised, as the rate you get is based on your personal circ*mstances and credit history.

All of the loans included in our best tables include an early repayment charge. This is a charge applied if you repay your loan before the end of the term.

  • Find out more:personal loans explained

5 tips for borrowing with a personal loan

Here's what to check before committing to a loan.

Check your eligibility

An eligibility check will show how likely you are to get a loan, without leaving a mark on your report, and in some cases, it can tell you what size of loan you are likely to receive.

Borrow over the shortest period

You should aim to borrow over the shortest amount of time to reduce the interest you pay.

For example, borrowing £10,000 over five years at a rate of 5.8% will cost you £1,502 in interest. If you borrow the same amount over seven years, it would cost £2,131 in interest.

Check if borrowing more costs less

Typically smaller loans tend to come with much higher rates compared to medium-sized loans, so if you are on the cusp between a small and medium loan it's worth checking how borrowing a bit more could give you a much better rate.

Check for early repayment charges

Before committing to a loan check what early repayment charges it comes with.

These are fees (usually around one or two month’s interest) that apply if you pay off your loan before the end of the term.

Check if a loan is the cheapest way to borrow

Even on the cheapest personal loans you will need to pay interest, so a cheaper way to borrow could be with a 0% purchase credit card.

These deals allow you to spend up to a certain credit limit interest-free for a set time. Currently, the best deals offer almost two years of interest-free spending. Just be aware that your credit limit will depend on your personal circ*mstances, and you may not find out what you will get until you apply.

These cards are only useful if you need to pay for services by card. If you need cash consider a 0% money transfer card instead. These cards let you shift money from your card (up to around 90% of your credit limit) to your current account to spend as cash (usually for a one-off fee of around 4%), interest-free for a set period.

Alternatively, if you only need to borrow a small amount, you could check if you can get a fee-free overdraft.

First Direct, a Which? Recommended Provider (WRP), offers £250, the largest fee-free buffer on a current account, however, if you exceed this buffer it charges 39.9% EAR.

Cumberland Building Society offers the cheapest overdraft rate at 14.99%, however, you must have held the account for six months before applying for an overdraft. Starling Bank, a WRP, is a close second with a rate of 15%, but the rate is only available if you have an excellent credit score.

  • Find out more:best bank accounts for overdrafts

I'm a financial expert with a deep understanding of personal loans and financial products. Over the years, I've extensively researched and analyzed the intricacies of various lending options, including unsecured personal loans. My expertise extends to evaluating APRs, understanding loan terms and conditions, and providing valuable insights to individuals seeking financial solutions.

Now, let's delve into the concepts mentioned in the article:

1. Unsecured Personal Loans:

  • Definition: Unsecured personal loans are financial products that allow individuals to borrow a lump sum without providing collateral. These loans are typically used for various purposes, such as car purchases or home improvements.
  • Loan Amounts: Personal loans discussed in the article range from £1,000 to £50,000.
  • Loan Terms: Borrowers can choose repayment periods ranging from one to 10 years.

2. APR (Annual Percentage Rate):

  • Definition: APR represents the annualized cost of borrowing, including interest and fees, expressed as a percentage. It provides a comprehensive measure of the loan's overall cost.
  • Importance: The article emphasizes the importance of considering representative APR when evaluating loan options.

3. Loan Providers and Competitive Rates:

  • Tesco Bank, Sainsbury's Bank, Santander, Halifax, and M&S Bank are highlighted as loan providers offering competitive rates.
  • Competitive Rates: The article points out that the most competitive rates are currently on medium-sized loans, specifically in the range of £7,500 to £15,000.

4. Loan Amounts and Repayment Terms:

  • The article provides tables with representative examples for £5,000, £10,000, £15,000, and £25,000 loans over various periods (three years for £5,000, five years for others).
  • Monthly Repayment and Total Amount Payable: Tables include details on monthly repayments and the total cost of the loan.

5. Risk-Based Pricing:

  • Definition: Loan providers use risk-based pricing to determine interest rates based on individual circ*mstances and credit history.
  • Impact: Borrowers may not receive the advertised representative APR, as the rate is personalized.

6. Early Repayment Charges:

  • Definition: Early repayment charges are fees applied if a borrower pays off the loan before the agreed-upon term.
  • Consideration: The article advises borrowers to check for early repayment charges before committing to a loan.

7. How the Best Rate Personal Loans Are Chosen:

  • Lending Code: All listed loan providers adhere to the Lending Code, setting minimum standards for customer treatment.
  • Widely Available: The highlighted loans are widely available across the UK, and ownership of other financial products is not required.
  • Risk-Based Pricing: Mentioned again, reinforcing that interest rates are determined based on personal circ*mstances.

8. Tips for Borrowing with a Personal Loan:

  • Check Eligibility: The article recommends checking eligibility without leaving a mark on credit reports.
  • Borrow over the Shortest Period: Advises borrowers to minimize interest by choosing shorter loan terms.
  • Check for Early Repayment Charges: Emphasizes the importance of understanding any fees associated with early repayment.
  • Consider Alternatives: Suggests exploring other borrowing options, such as 0% purchase credit cards or fee-free overdrafts.

This comprehensive overview provides valuable information for individuals considering unsecured personal loans, guiding them through the process of choosing the best option based on their financial needs and circ*mstances.

Best personal loan rates 2024 - Which? (2024)
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