Loans
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- Check eligibility for loans before you apply, without impacting your credit score
- Search for a loan from 35 trusted lenders^
^ Correct as of September 2024.
We compare loans from trusted lenders, including:
Why choose Compare the Market?
See what loans you could be eligible for in under 4 minutes[2]
See loans from a wide range of lenders
Loans available up to £50,000 (£500,000 for homeowner loans)
[2] Correct as of June 2024.
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What is a loan?
A loan is a lump sum of money that you borrow from a lender. When you take out a loan you agree to pay back what you borrow, plus interest, in monthly instalments over an agreed period until the loan is paid off.
The interest on a loan is worked out as a percentage of the loan balance and added to the monthly repayments. Lenders decide what interest rate to charge you based on factors including your credit score and how long you take to pay back the loan.
A loan could be useful if you need to borrow a larger amount of money upfront than you could get through other types of borrowing.
What can I get a loan for?
You can get a loan to fund a variety of expenses and to consolidate existing loans or debts:
Unexpected expenses
Unsecured personal loans can be used to cover large, unexpected bills. For example, emergency repairs to your boiler or car.
Buying a car
There are different ways to finance buying a car. You could look at personal loans, which are unsecured. Or there are hire purchase and personal contract purchase loans, which are secured against the vehicle you’re buying.
Home improvements
Looking to get a new kitchen or bathroom, or build an extension? A home improvement loan could help you fund your project. These loans can be secured or unsecured.
Weddings
The best day of your life can come with a big price tag. Although you’ll want to pay for most of it yourself, a wedding loan could help you spread the cost.
Managing your money
A debt consolidation loan can bring all your debts together into a single loan with one payment plan.
Bridging the gap when selling your home
A short-term bridging loan could allow you to buy a new home while you wait for the sale of your current home to complete.
Spreading the cost of a holiday
Ideally, you’d use your savings to pay for a holiday. But if you’re planning the trip of a lifetime, you might want to top up your savings with an unsecured holiday loan.
What’s the best type of loan for me?
The best type of loan for you will depend on your individual circumstances.
1. Unsecured loan
Also called personal loans, an unsecured loan typically allows you to borrow up to £25,000 without putting up a valuable asset as security.
2. Secured loan
A secured loan requires you to put up something you own as collateral – in the case of a homeowner loan, that would be your house. In the case of a secured car finance loan, that would be your car. You may be able to borrow larger sums of money with this type of loan, but if you can’t pay it back you could lose your home or your car.
3. Guarantor loans
A guarantor loan could be an option if you have bad credit or no credit history at all. It’s an unsecured loan but is guaranteed by someone agreeing to make the loan repayments if you’re unable to.
You can’t compare guarantor loans with Compare the Market.
4. Peer-to-peer loan
With a peer-to-peer loan, you borrow money from an individual or a group of people instead of borrowing from a financial institution. Peer-to-peer websites connect you with people willing to lend to you, then act as intermediaries. Peer-to-peer loans are typically unsecured.
You can’t compare peer-to-peer loans with Compare the Market.
5. Bad credit loan
A bad credit loan is specifically aimed at borrowers who have a poor credit score or no credit history. This type of loan usually has a higher interest rate and tends to come with restrictions, such as a borrowing limit. Sometimes you’ll need a guarantor before a lender will approve your loan application.
See if you’re eligible for a secured, unsecured or bad credit loan by using our eligibility checker before you apply. It won’t impact your credit score.
Compare the Market Limited acts as a credit broker, not a lender. To apply you must be a UK resident and aged 18 or over. Credit is subject to status and eligibility.
Consider your options carefully
Never rush into taking out a loan. Having a clear understanding of what you can comfortably afford to repay is essential.
Consider how changing circumstances could affect your ability to repay a loan. And think carefully about whether borrowing is the right option for you.
Not being able to pay back your loan on time can have serious financial consequences.
What will my loan cost?
Understanding how much you’ll pay for your loan isn’t just a matter of knowing what the monthly repayments will be. You should also compare loan interest rates and look at what the loan will cost over the whole term – the total amount repayable.
Here’s an example for illustrative purposes only. It assumes there are no extra fees.
| Loan amount | Length of loan | Monthly repayment |
|---|---|---|
| £5,000 | 2 years | £229.73 |
| APR | Interest payments | Total amount repayable |
| 10% | £513.55 | £5,513.55 |
A shorter loan term will mean you pay less interest overall, but the monthly repayments will be higher.
A longer loan term will have lower monthly repayments, but you’ll pay more in interest overall.
Loan calculator
To get an idea of how much a loan could cost you, use our loan calculator.
You can use it in one of two ways:
- If you know how much you want to borrow: you can adjust the loan term and APR to see how much your monthly repayments could be.
- If you know how much you can afford to repay each month: you can adjust the loan term and APR to see how much you could afford to borrow.
Step-by-step guide to finding the best loan for you
1. Check your credit report
A credit report that’s in good shape can help you access the best loan rates. You can check your credit report for free with the three main credit reference agencies – Experian, Equifax and TransUnion.
2. Decide how much you want to borrow
Before you start exploring bank loans and other available options, work out how much you need. Don’t be tempted to borrow more, even if you’re eligible to do so.
3. Check you can afford the repayments
Use our loan calculator to get an idea of how much your repayments might be. You can adjust the amount or length of the loan to weigh up affordability.
4. Check which loans you might be eligible for
Use our loan eligibility checker to see which loans you’re likely to be accepted for, without impacting your credit score.
5. Compare loans and apply
Check and compare loan interest rates and terms on loans you’re likely to be eligible for. Make your decision and apply for a loan of your choice.
Will I be accepted when I apply for a loan?
It’s not guaranteed. Whether you’ll be accepted depends on a number of factors, including:
- Your credit score
- Your income and existing debts
- How much you want to borrow.
When you compare loans with us, you can find out which loans you’re eligible for by answering a few questions. This is a soft credit check and won’t impact your credit score.
Check eligibilityHow can I get approved for a loan?
If you’ve previously struggled to get a loan or are worried about being accepted for the first time, here are some tips that could help you get accepted:
- Build your credit score: if you have a low credit score, you may find it difficult getting approved for a loan or the best loan rates. You can take steps to improve your credit score before you apply for a loan.
- Check eligibility: use our eligibility checker to see which loans you’re likely to be approved for. Only apply to lenders most likely to accept you.
- Don’t look to borrow too much: lenders will consider the affordability of your loan, taking your income and any existing debts into account. If you’re looking to borrow more than you can pay back, you might be turned down.
- Include all sources of income: don’t forget to mention any additional income you have on top of your salary. From investments or a rental property, for example.
- Double check your application: review all the information you’ve given before you submit your application. Watch out for typing errors that could derail your chances of success.
- Space out loan applications: if you’ve been turned down for a loan or another type of credit, wait before applying again. Making multiple credit applications in a short amount of time could lower your credit score and it’s a red flag to lenders. Read our guide on what to do if you’re refused a loan.
Start a loan comparison
Managing your money while juggling everything else life throws at you can sometimes be tricky.
If you find yourself needing a quick cash boost to help you manage a surprise expense, or you want to fund home renovations, there are bank loans and loan products out there that can help.
We have lots of information on what could be the best loan types for you. And our loans eligibility checker can give you an idea of which bank loans and other options you’re likely to be accepted for before you apply, without affecting your credit score.
Once you know which type of loan you need, shop around and compare our best loan deals to help you find the right one for you.
With interest rates so high, how can I get the best loan deal?
The Bank of England base rate currently stands at 5%. With rates so high, the cheapest loans can be more difficult to find.
To improve your chances of getting the best loan deal for you, start by building your credit score. A good credit rating shows lenders that you can manage your finances responsibly and are a reliable borrower. This could give you access to better interest rates.
Shopping around can help you compare loan interest rates to see which are the most competitive. Use our loan comparison service to check which loans you’re likely to be eligible for before you apply. Checking your eligibility won’t affect your credit score.
Beware of scams
According to the UK Government, fraud is by far the most common crime, accounting for over 40% of all offences in England and Wales. Even the most financially savvy borrowers could be duped by loan fraudsters, so it always pays to be cautious.
If you think you’ve found the best loan possible at an unbelievable rate, remember the golden rule: if it sounds too good to be true, it probably is.
Here are a few things to watch out for:
- Cold calls, texts or emails offering you a loan and asking you to reply or call back
- You’re asked to pay an upfront fee
- You’re asked to give out personal details
- You’re asked to pay quickly or unusually
- Loan companies that are not authorised by the Financial Conduct Authority (FCA).
If you need to report a scam or suspected fraud, contact Action Fraud online or by phoning 0300 123 2040 (Mon-Fri 8am-8pm).
Read our guide for more tips on how to avoid loan fraud.
What our expert says...
“Borrowing is a normal part of life for millions in the UK – many of us need to borrow at some point to fund a major purchase, whether it be a new car or a new kitchen. Some of us will also choose to use a new loan to pay off several existing ones as a lower rate. It makes sense to shop around to find a loan, and if you decide a loan is right for you try to keep costs to a minimum and only borrow what you can afford to pay back, and always keep up with payments.”
- Guy Anker, Personal finance and insurance expert
What do I need to get a loan?
To be eligible for a loan, you’ll need to undergo a credit check and meet the potential lender’s requirements. Generally, you’ll need to:
- Be at least 18 and meet any other age requirements – for some lenders this may be 21 or older and there may be upper age limits too
- Have a regular income
- Be on the electoral register
- Have a bank account
- Be able to afford the repayments.
Frequently asked questions
Can I get a loan for a house deposit?
Although it’s possible to get a loan for a house deposit, many mortgage lenders will reject your mortgage application if you’re using a personal loan to pay the deposit.
Mortgage lenders carefully assess your affordability to make sure you can afford the repayments on your home. If you’re paying interest on a loan for the deposit on top of your mortgage repayments, you’ll likely be considered higher risk. That means if you are accepted for a mortgage, it’s likely to be more expensive.
How quickly can I get a loan?
How long it takes to get a loan depends on the lender, their application and approvals process, as well the type of loan you’re applying for.
When you apply for a loan, lenders check your credit score and review your application. This could take anything from a few hours up to a week, or more. Once you’re approved, many lenders can have the funds in your account within a few days. Some even say the same day, if your application is accepted.
There are lenders that offer fast turnaround times – for example for payday loans. However these tend to be very expensive compared to other types of borrowing.
You can’t compare payday loans with Compare the Market.
Do I need a good credit rating to get a loan?
Having a good credit score is important if you’re to be accepted for a loan, but having a bad score doesn’t mean you’ll always be refused. There are several loan options for those with bad credit. However, they typically have higher interest rates and come with borrowing restrictions.
A good credit score shows lenders you’re responsible with money and have a history of borrowing and paying off debts. This is why people with the best credit scores get the best loan rates.
How much can I borrow?
This will depend on the type of loan and your financial situation. Your credit score, income, as well as existing bank loans, debts and other outgoings will be taken into consideration.
If you opt for a secured loan, you may be able to borrow a larger amount. But if you can’t meet the repayments, your lender could repossess the item – such as your home or car – you offered as collateral.
What is a representative example?
A representative example must be shown when a loan is advertised to illustrate how much borrowing that amount of money over that time period could cost. This is part of the FCA’s rules on financial promotions.
The representative example will show the:
- Loan amount
- Interest rate
- Length of the loan
- Representative APR
- Repayment instalment amount
- Total amount payable
APR is the total cost of borrowing money over the course of a year. It includes any fees that come with the loan and the interest payable.
The representative APR must be offered to at least 51% of successful credit applicants. However, the rate you’ll get depends on your credit record and personal circumstances.
How long can I borrow for?
How long you can borrow for depends on the amount you’re borrowing and the type of loan. You generally have longer to pay back larger loans.
Typically, you can pay back a personal loan over 1 to 10 years – but you may find longer or shorter terms from some lenders.
What’s the cheapest way to borrow money?
It depends how much you want to borrow, for how long, and your personal circumstances. Borrowing options include:
- 0% purchase credit cards: ideally, you’ll need to repay in full before your 0% period ends and keep up with the minimum monthly repayments.
- Personal loans: if you have a good credit score, you could get lower rates.
- Secured loans: using an asset, like your home, as collateral could mean lower rates, but your home could be repossessed if you fail to make the repayments.
- Car finance: includes loans that are secured against the car you want to buy.
- 0% overdrafts: a few bank accounts, particularly student and graduate accounts, let you go overdrawn in the short-term without paying any fees or interest.
What is a homeowner loan?
A homeowner loan is a type of secured loan that uses your home as collateral. It offers you access to larger amounts and longer loan terms, as well as potentially lower loan rates than unsecured loans.
This type of loan could be an option if you have a bad credit history. When you apply, the lender will check whether you have enough equity in your home to borrow against.
It’s important to be aware of the risk of taking out a loan secured on your home. If you can’t meet the repayments on your homeowner loan, the provider can repossess your home.
What is a soft search?
A soft search checks your credit score and history. But it won’t show up on your credit history or affect your credit score. We carry out a soft search when you use our eligibility checker.
Can I overpay or pay my loan off early?
It depends on your loan agreement. Although providers must allow you to pay back personal loans in full, there may be fees for early repayments or overpayments. Read more on repaying loans early.
What happens if I miss a loan repayment?
Missing a loan repayment will likely mean you’re charged a penalty fee. It could also negatively impact your credit score, meaning you could find it harder to borrow in the future.
Missing a loan payment can also mean the loan ends up costing you more overall. That’s because interest could be charged on the higher remaining balance.
What if I’m struggling to repay my loan?
If you’re struggling to repay your loan, get in touch with the loan provider. They may give you more time to make the payment. Simply missing repayments will affect your credit score and you’ll be charged a fee for each one you miss.
If you need help with debt, organisations like Citizens Advice and StepChange Debt Charity can offer free non-judgmental advice.
What is APR?
APR represents the cost of borrowing over 12 months and includes the interest rate and any other standard charges. It’s short for annual percentage rate.
Does APR rise with interest rate increases?
If you have a loan with a variable APR and the Bank of England base rate increases, so could your APR. This means your loan repayments will be higher.
If you have a fixed rate loan, the APR will remain the same, even if interest rates go up.
Will searching for a loan affect my credit rating?
Searching for a loan with Compare the Market won’t affect your credit rating. However, each formal application for credit will be marked on your credit file.
If you make several applications in a short period of time, lenders could see this as a sign that you’re in desperate need of a loan or that you’re taking on more debt than you can afford.
What is a payment holiday?
A payment holiday is when you take a short break from paying back your loan. The payment holiday needs to be agreed with your lender. You may need a payment holiday if you’ve lost your job, taken maternity leave or received unexpected bills to pay.
You’ll continue to be charged interest if you take a payment holiday and you’ll still have to pay back the loan at a later date. Your monthly repayments may also go up after the agreed payment holiday is over – check the terms with your lender.
Can I take out a loan while on benefits or unemployed?
It’s possible to get loans if you’re unemployed, but they usually come with higher interest rates and specific conditions.
Having little or no income poses a bigger risk to lenders. If they do offer you a loan, they may ask you to put up your home or car as collateral, or find a guarantor willing to repay the loan if you can’t.
If you’re on certain benefits, you may be eligible for a Budgeting Loan from the government.
Is it better to borrow from my bank?
Borrowing from your bank isn’t necessarily the best option. Your bank will usually be willing to lend you money if you have a good credit history and hold a current account with them. But that doesn’t automatically mean their borrowing terms are right for you.
It’s a good idea to check your eligibility for different loans with a loan comparison service like ours. You can then compare the terms offered by your bank with a range of other options to see which is the most affordable.
