Personal loans

Compare personal loans

Admiral’s lowest loan rate, exclusively through us.
See how it compares. Representative APR 12.6%.
Available until 30 January 2025 12pm. Admiral's offer T&Cs apply.^{^}

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Check which loan rates you could get, without affecting your credit score
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^{^} T&Cs: Eligibility: Aged 18+, a permanent resident of England, Wales or Scotland, own a UK bank account, lived in UK for 3+ years, seeking credit as an individual, can afford the loan with no bankruptcies, high-value or recent CCJs etc. In employment or retirement with £19k+ annual income. Compare the market acts as the credit broker, not lender. Credit subject to status and eligibility checks. Representative Example: Borrowing £10,000 over 60 months with monthly repayments of £222.07. The total amount repayable will be £13,324.20. Representative 12.60% APR, annual interest rate (fixed) 11.93%.

Personal loan eligibility checker and calculator

Before you apply for a personal loan, you can search for loans you’re likely to be accepted for with our free eligibility checker. It’s a soft credit search so won’t impact your credit score in any way.

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Our loan calculator gives you an idea of how much you could borrow when comparing loans. It can also tell you how much your monthly repayments could be.

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What is a personal loan?

A personal loan lets you borrow an amount of money from a lender over an agreed period (or term). The amount you borrow, plus interest, is typically paid back in fixed monthly instalments.

Most banks and building societies offer personal loans up to £25,000. A small loan can help you spread an upfront cost over several months or years. It could be a good option if you have a big expense coming up that you’d struggle to pay for all at once.

How do personal loans work?

Personal loans are sometimes called unsecured loans because they don’t require you to put up a valuable asset, such as your car or home, as collateral. This means you don’t need to risk your car or home to borrow the money. Here’s how personal loans work:

1. Apply for a loan

Decide how much you want to borrow and for how long. Personal loan terms are usually between one and five years. Some can stretch to 10 years, so they’re not always short-term loans.

When you apply, the lender will run a credit check to decide whether you’re eligible for the loan. They’ll also look at your income and expenses to make sure you can afford the repayments.

2. Receive your money

If your application is approved, you’ll be asked to sign the loan agreement. After that, you’ll receive the money as a lump sum directly into your bank account. It usually takes one to two days to arrive.

3. Pay back your loan

Start paying back the loan, plus interest, in fixed monthly instalments for the agreed term.

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.

What can I use a personal loan for?

You can use a personal loan to fund a big purchase, or to consolidate existing debts into manageable monthly payments.

Personal loans are often used to fund:

Home improvements – a kitchen makeover could cost anywhere between £2,000 and £25,000, while the average cost for a new bathroom is around £7,000. A home improvement loan could help fund your renovation projects.
Buying a car – an unsecured personal loan would enable you to buy a car outright and own it straight away. Compare with other types of car finance to see which option would suit you best.
Weddings – the average cost of a UK wedding in 2024 is more than £20,500. If you can’t pay for your big day in one go, a wedding loan could help spread the cost over a longer period.
Unexpected expenses – if you’re suddenly facing a major expense, such as a broken boiler or car repairs, a personal loan could provide emergency funds to fix your problem.
Debt consolidation – a debt consolidation loan lets you pool your existing debts into one manageable payment plan. Just make sure you do the sums; extending the length of your loan means you’ll be paying interest for longer. This may cost you more overall.

How much does a personal loan cost?

The cost of a personal loan depends on how much you want to borrow, the APR and how long you take to pay back the loan.

Personal loan rates vary according to the size and length of the loan, as well as your personal circumstances. A longer loan term may attract better interest rates, but the overall cost will be higher than a short-term loan.

The following example is for illustrative purposes only. It shows the total cost of borrowing £10,000, at a different APR over two and five years, assuming there are no extra fees.

APR/loan term	Monthly repayments	Interest payments	Total cost of loan
10% over 2 years	£459.46	£1,027.10	£11,027.10
7% over 5 years	£197	£1,819.94	£11,819.94

Use our loan calculator to get an idea of how much a personal loan could cost you.

Advantages and disadvantages of personal loans

If you’re thinking of taking out a personal loan, here are some pros and cons to weigh up first.

Benefits of a personal loan:

You can use the money for whatever you like

You could pay for home improvements, a wedding or a car, for example. You’re not tied to a specific purpose, unlike with car finance.

Flexible terms

You can choose how much you want to borrow and how long you’d like to take to repay it. However, this does depend on your credit score and will affect the amount of interest you’ll have to pay.

Fixed interest rates and repayments

Personal loan interest rates are usually fixed, unlike credit cards. And you’ll repay a fixed amount every month, which makes it easier to budget.

Consolidate debts into one monthly payment

Taking out a debt consolidation loan could make your debt more manageable by combining multiple monthly payments into one. If you’re able to secure a better interest rate, your monthly repayments could be less too. But bear in mind that extending the length of your loan means you’ll may pay more in the long run.

Apply and receive the money quickly

You can often apply for personal loans online. And if you’re approved, the lender will usually deposit the money into your account within a few days (or even a few hours if you’re already a customer).

Drawbacks of a personal loan:

Higher interest rate than some alternatives

Personal loans tend to have higher interest rates than loans secured against an asset. That’s because they tend to have shorter terms and involve more risk for the lender.

Just be aware that although a secured loan may have a lower interest rate, you risk losing the asset (your home or car, for example) you used as collateral if you fail to pay back the loan.

Long-term commitment

If your income changes after taking out the loan, you might struggle to keep up with your repayments.

Good credit score needed for the best loan rates

The interest rate advertised may not be the rate you’re offered (unless it’s a guaranteed rate). A poor credit score makes it difficult to qualify for the best personal loans.

Penalties if you default

If you fail to make your repayments on time, this will damage your credit score. Your lender may even take legal action to settle unpaid debts.

How can I get the best loan rates when interest rates are high?

Personal loan rates are normally linked to the Bank of England (BoE) base rate – sometimes called the bank rate. The BoE bank rate is currently at 4.75%.

A higher bank rate could mean it’s more expensive to take out a new loan. But there are ways you can improve your chances of finding a lower rate, including:

Building your credit score – a good credit score shows lenders that you’re a reliable borrower. Loan providers are more likely to offer you their lowest rates if they can see you handle your finances responsibly.
Shopping around – different lenders set interest rates based on their own lending criteria, so it makes sense to compare your options. Compare loans with us and we’ll help you search from a range of trusted providers.

How much can I borrow with a personal loan?

You can typically borrow between £1,000 and £25,000 with a personal loan. The amount depends on your credit rating and how much you can afford to repay. Some lenders offer larger loans, but these may only be available to existing customers.

It’s important to consider the annual percentage rate (APR) when working out how much you can afford to borrow. The APR is the cost of borrowing money over a year. It includes the interest on your loan as well as other charges you may have to pay, like an annual fee.

When you compare personal loans, don’t just assume you’ll get the advertised APR. Unless it’s clearly labelled as a guaranteed APR, the rate you see will be a representative example of what customers could get.

Lenders only need to offer the representative APR rate to 51% of successful applicants – typically those with the best credit ratings.

Only borrow what you actually need. Even though it can be tempting to get a bigger loan because the interest rate is lower, the more you borrow, the more you’ll end up paying overall.

How can I find the right personal loan for me?

Here’s how to find a personal loan to suit your needs:

Work out what you can afford to repay – lenders look at your income and expenses to make sure you can afford a loan, and you should too. Work out what you can comfortably repay each month and don’t overstretch yourself financially.
Only borrow what you need – there’s no point paying interest on debt you don’t need. Resist the temptation to borrow more, even if you’re eligible to do so.
Shop around – use our eligibility checker to give you an idea of what personal loan rates could be available to you. Our personal loan comparison tool will only show you loans you’re likely to be accepted for and won’t impact your credit score.
Check your credit score – can you improve your credit score before applying for a loan? Check your credit report for any errors that could affect your chances of acceptance.
Check the loan terms – if you want the option of repaying the loan early, look for one that won’t involve paying a penalty charge.

What are the alternatives to personal loans?

There are six main alternatives to personal loans:

Secured loan

If you’re having trouble being accepted for a personal loan or you’re looking to borrow more than £25,000, you could try applying for a secured loan. This type of loan is also known as a homeowner loan.

You’ll need to offer an asset such as your home or car as collateral. This could be recovered by the lender if you fail to make the repayments.

Because secured loans are less risky for lenders, they tend to offer:

Lower interest rates
Longer terms
Higher borrowing limits.

Credit cards

If you’re looking to borrow a small amount, a 0% interest credit card could be a useful alternative to a personal loan.

Make sure you can afford to keep up with the minimum monthly repayments and ideally repay the full amount before your 0% period ends.

Overdraft facility

If you only need to borrow a small amount of money for a very short time, consider using an interest-free overdraft, if you have one. If you don’t, it could be worth looking at alternative current accounts that offer this facility.

Peer-to-peer personal loan

Peer-to-peer (P2P) loans work in a similar way to standard personal loans. The difference is you borrow money from another person or group of people, instead of a bank or building society.

You can find P2P lenders on dedicated websites. Interest rates vary and can be affected by your credit score. However, P2P lending can sometimes offer lower interest rates compared to traditional lenders.

Car finance

Car finance helps people buy a car that they couldn’t normally pay for up front. You’ll typically pay a deposit, followed by monthly repayments (with interest) over a fixed term. This could be from two years up to five years.

There are two main types of car finance available:

Hire Purchase (HP) – your loan will be secured against the car, and its remaining cost (less the deposit) will be split into monthly repayments. Once you’ve made the last repayment, the car will be yours to keep.
Personal Contract Purchase (PCP) – you repay the estimated amount of value the car will lose during the loan term (its depreciation), rather than its purchase price. At the end of the deal you can hand the car back, buy it by paying a one-off lump sum or use any positive equity as a deposit on a new car.

Remortgaging

If you have equity in your home, you may want to free up some cash by remortgaging. Just be aware that borrowing more will increase the size of your mortgage.

Also consider any fees you may need to pay, such as an early repayment charge or valuation fee.

What details do I need to compare personal loans?

To compare personal loans, we’ll need to know:

How much you want to borrow
All the addresses you’ve lived at in the past three years
Some personal details, including your employment status and occupation
Your employer’s details, including their address and phone number
Your annual salary and any other income
Your expenses, such as rent and mortgage payments
Any financial dependents.

Once you’ve chosen a personal loan, you’ll be taken to the lender’s site to apply. You’ll likely have to provide additional information.

Checking your credit score

It’s a good idea to check your credit score for free before you compare personal loans. This will give you a chance to correct any mistakes and see if there are any steps you can take to improve your score before you apply.

What our expert says...

"There are many reasons why people take out personal loans and, in some cases, a loan can even help you improve your credit rating. Remember to always check the total cost of the loan and plan a budget to pay it back. Only take out the amount you need and pay it back as quickly as you can to reduce the amount of interest.”

- The Editorial Team, Experts in personal finance, insurance and utilities

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Frequently asked questions

What happens if I miss a personal loan repayment?

If you miss a loan repayment, the lender may add extra charges and interest to your loan. Missed payments will also be noted on your credit report, which could harm your credit score and make it harder for you to borrow in the future.

It could also lead to the provider taking further legal action or passing your debt to a collection agency. That could result in county court judgments (CCJs).

If you fail to stick to the terms of a CCJ, the court could allow the creditor to secure your unpaid debt against your assets. In that case, you could even lose your home.

If you think you’re going to miss a loan payment, contact your lender. The sooner you discuss your options, the more flexible they may be.

Do I need a good credit score to get a personal loan?

No, you may still be able to get a personal with bad credit, but it will affect how much you can borrow and the amount of interest you’ll be charged. Some lenders may not lend to you if you have bad credit, so you may have less choice.

The better your credit score, the better terms you’ll be offered for a personal loan because the lender will be more confident that you’ll be able to repay it.

Can you be pre-approved for a personal loan?

Yes, you can be pre-approved for a personal loan. Pre-approval means your loan application will be accepted based on the information you’ve provided.

The interest rate, loan amount and term length will usually be guaranteed, pending final checks from the lender. Put simply, it’s a ‘what you see is what you get’ deal.

What can I do if I need to borrow more than they’ll lend?

If you need to borrow more than the lender is willing to offer you, or you need more than the typical £25,000 limit, consider a secured loan. You could borrow £100,000 or even more with a secured loan, but you’ll need to offer something of value as collateral, like your home.

Think carefully before taking out this type of loan. If you miss repayments, the lender can seize the asset you put up as collateral to repay what you owe.

What happens if I can’t repay my loan?

If you’re struggling to repay your loan, contact your lender as soon as possible. They may be able to support you with managing your repayments. Alternatively, contact a debt advice service. They’ll be able to help you organise a debt repayment plan with your lender.

If you can’t reach a compromise with your lender, you’ll probably be charged penalty fees for partial, late or missed repayments.

Can I repay my loan early?

You can pay off your personal loan early, but you might have to pay an early repayment charge (ERC). Early repayment charges vary, but you can usually expect to pay the equivalent of one to two months’ interest.

What will happen if UK interest rates change?

If your personal loan has a fixed interest rate, it won’t be affected if UK interest rates change. Your monthly repayments should remain the same, regardless of what happens to the Bank of England base rate.