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Personal loans UK

Searching for personal loans can be a complicated process. This guide will help you find a personal loan to suit your needs.
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How do I find the best personal loan?

Searching for personal loans can be a complicated process. Uswitch has about 50 lenders offering personal loans in the UK, from traditional banks and building societies to online banks and post office loans.

Compare personal loans

Compare a range of loans from personal loans to debt consolidation loans.

It is important to shop around to get the best deal, and that is where Uswitch loans can help. If you're looking for the best personal loan then Uswitch personal loans can help you search for the cheapest personal loan to suit your needs.

How can Uswitch personal loans help me find the best deal?

When you're looking for a personal loan in the UK you need to take into account a number of things.

  • How much you want to borrow?

  • How long you want the term of the loan to be?

  • How much interest you will be paying?

  • Personal financial circumstances and credit rating

All these factors will affect the amount of monthly premium you will pay for your loan.

When you use the Uswitch personal loans comparison tool you simply put in how much you want to borrow, and over what term.

The search results will show you the best loan based on your specific needs. The Uswitch loans service will list loans in terms of the total amount payable, any set up fees which might be included, the representative APR interest rate that you might be paying, and how much you might pay each month.

Then there's a button next to the loan that enables you to click through and apply for one of the Uswitch personal loans, which have come up using your search terms.

You can also check the eligibility criteria to see whether you're likely to qualify. After you click through to the destination page you will also be able to see more information about the loan and the repayment terms. 

How much can I borrow on a personal loan?

Personal loans are typically for borrowing anywhere from £1,000 to £10,000.

Generally speaking, loans are cheaper the higher the amount you borrow (as the lender is guaranteed more in interest repayments), although the upper limit for personal unsecured loans tends to be up to £25,000.

How do I know if a loan is good value?

The main criteria to look out for when comparing loans is the APR, or ‘annual percentage rate’.

The APR is what loan companies will advertise to you. It's an interest rate that includes fees and charges you will pay to give you an idea of the actual interest rate you will pay over the course of a year.

When you get the search results for Uswitch personal loans UK you will be shown a representative APR. This is not necessarily the rate that you will pay. The final rate you pay will be decided once you have made a personal application and it has been approved. The representative APR figure is just a guide.

What is a ‘representative’ APR?

A representative ‘APR’ shows you the interest rate that at least 51% of people who applied for the loan were offered. So, whilst APR is the best way to compare different loans, finding out which APR you will be offered is trickier.

When you apply you may be offered a higher, or lower, rate based on your credit history.

You have no way of knowing this until you apply for the loan, which will leave a footprint on your credit file. Too many footprints and you may be turned down for loans in the future. So it's best to be sure that you want to go ahead with the loan before you make a formal application.

Try not to make lots of applications within a short period of time, as this may affect your credit rating.

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What are the hidden costs of a personal loan?

The majority of loans make their money – and hence justify the lower APRs – by fixing the rate and term of the loan.

So, for instance, if you borrow £1,000, you will know from the outset exactly how much per month you will be repaying and what your total interest payments are.

To counteract you paying back the loan early, loan providers may charge you early repayment penalties if you try to pay back too much of your loan too quickly Some loan providers won’t charge this, so read the fine-print.

You should also know the difference between secured and unsecured loans. Secured loans are linked to your property, so if you can't pay back the loan your home may be repossessed.

Unsecured loans are not linked to your property, and while the interest rate may be higher, your home is not at risk if you default on your repayments. 

Who are the personal loan providers in the UK?

You can get a personal loan in the UK from high street banks and building societies, supermarkets, shops and post offices, and online banks. 

With online banking you benefit from the fact that the lenders have lower overheads, so they usually charge less for personal loans. The best way to compare all these providers is to use the Uswitch loans comparison tool to see which lender is offering the best deal, as these offers change frequently.

Why should I use the Uswitch personal loans service? 

Let us take the hard work out of finding the right UK personal loan for you. All you have to do it tell us a few details, and we’ll do the rest.

Our personal loans comparison service is completely impartial - we show you the most accurate listings of loan products that are available now.

Which is better – credit card or personal loan?

While a credit card is a common way to borrow a small amount of money for a short time, and a mortgage a common way to borrow a large amount for a longer term, standard loans can be the best way to borrow a fixed amount.

Personal loans enable you to borrow a fixed amount of money and repay it in regular monthly instalments over a period of time. They can be a helpful way to pay for home improvements, for example, because you can borrow a larger amount than you might be able to on a credit card.

Why choose a Uswitch personal loan?

For borrowing a fixed amount, loans often work out the cheapest option when compared to borrowing on a credit card or working into your overdraft.

However, to get the most out of your loan you need to know what to look out for. Loan providers are required by law to show you an APR so you can compare between different loans. The higher the APR, the more you will pay in interest over the lifetime of your loan.

Also watch out for any hidden set up fees, penalties for paying off your loan early, or any other costs. The Uswitch loans comparison service shows you these before you commit to the loan. You can also find these in the small print of your loan agreement.

I need a few hundred pounds. Should I get a payday loan or take out a cash advance with my credit card?

Authorised overdrafts are probably the cheapest way to ensure you have access to an emergency fund and are easy to set up. You should approach your main bank provider to whom your salary is paid and request an overdraft facility. They will run a credit check to authorise this.

Credit unions are another good alternative. These financial co-operatives are member-run and offer better rates for small loans under £4,000.

Payday loan providers charge very high rates of interest and are not advisable. Withdrawing money on a credit card is expensive, with 2-3% fees just for withdrawals.

Would a personal loan be the best option for me to buy a new car?

There are a number of ways to pay for a new car, including a personal loan, overdraft or using your savings that you have built up in advance. There is also the option to use car finance, which may be offered to you in the showroom.

Whatever option you choose, it is important to be clear about the interest rates and fees you will need to pay, including any arrangement fees and penalties for paying off the loan early or missing payments. Ask for more information if you are not sure exactly how much you will be paying each month, and overall.

Compare personal loans

Compare a range of loans from personal loans to debt consolidation loans.