How to find a cheap loan

Cheap loans are becoming increasingly common in the UK as more loan companies come onto the market, creating more competition. If you're looking for a loan, your main priority is probably to save money, so here are uSwitch.com's tips on finding a cheap loan that's right for you.

When you're looking for a cheap loan, you probably just think about the interest rate (or APR), but there are other charges to consider that might make a difference. For instance, some lenders charge a loan arrangement fee when you apply. Like credit card companies charging an annual fee, this might bring your interest rate down, but you may be better off looking for a cheap loan with a low rate and no fees.

You might also be asked to pay an early repayment fee, or settlement charge. This will only apply if you decide to pay off your loan in full before the loan term expires, but lenders can charge the equivalent of up to two months' interest for this. Even if you don't think you'll be able to settle your debt early, it's worth looking for a cheap loan that doesn't charge for early repayment, just in case.

There are plenty of cheap loans available in the UK. Every high street bank and building society offers one - most of these companies offer an online option as well - and new online banks are cropping up on the market all the time. So it's difficult to know where to start looking for your cheap loan. But all this competition means that there's one for everyone. It’s just harder to sort through the huge amount of offers to find that perfect loan for you.

To help you shop around for your cheap loan, uSwitch.com offers a loans comparison service that searches the market for loans that match your criteria. All you need to do is answer a few simple questions about your loan: for instance, how much do you want to borrow? How much can you afford to pay back, per month?

We will then give you a list of the cheap loans that are exactly right for you. The small print will be set out clearly, so you can look for a loan with a low APR, no arrangement fee and no early repayment fee. Without this easy-to-use comparison service, you'd have to search the literature of all the loans available in the UK to get a good idea of which loans would suit you best.

The uSwitch.com comparison service is completely impartial. The website is not affiliated with any loans provider so it won't try to push you towards applying for a certain loan. uSwitch.com makes its money from small commissions from the lenders, but this does not affect their ranking on the results you're given.