Editorial Note: This content has been independently collected by the Forbes Advisor team and is offered on a non-advised basis. This content is not part of the comparison service provided by RunPath Regulated Services. Forbes Advisor may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations.
Rates on personal loans are at their cheapest for sums of between £7,500 and £15,000, in some cases stretching to £25,000. So, when it comes to borrowing to fund bigger-ticket expenses such as a new car, home improvements, a holiday or wedding, finding the most competitive personal loan available to you can be a sensible and cost-effective way of doing it.
We carried out some research (March 2022) to uncover the best deals on personal loans of this size, which we have listed below. Just bear in mind that the rates you see are representative. This means you could be offered higher depending on your credit score and personal circumstances.
Best Loan Rates For Personal Loans
*Based on a settlement figure as set out under the Consumer Credit (Early Settlement) Regulations 2004. This states that if you have less than 12 months remaining of your loan, providers can charge up to 28 days’ interest. An extra 30 days’ interest can be added on if there is more than one year of the loan term remaining, taking the total maximum penalty to 58 days’ interest.
Why a personal loan?
The best advertised APRs (annual percentage rates) we found during our research (March 2022) on personal loans between £7,500 and £15,000 start at just 2.8%.
Despite recent hikes in interest rates, this still equates to historically low levels – supported by a healthy dose of competition between lenders. However, it’s important to note that this won’t necessarily be the rate you are offered when you come to apply – more on this later.
What else is there to know?
Once you’ve been approved, loan payments tend to hit your designated account the next working day or even the same day if you have a current account with the same bank, or there are just some efficient processes in place.
Most providers offer some kind of payment holiday offering in each year – usually one month, but sometimes two. You will need to make a formal application and be eligible (for example, you have kept up with payments).
If you find you can repay the loan in full ahead of time, you are free to do so – but many of the best deals apply an early repayment charge of between one and two months’ interest. Overpaying, either as a lump sum or a little extra each month however, tends to be free.
You can usually check each lender’s terms and conditions at its website (this could mean downloading a PDF). If you can’t see what you need, put in a phone call and speak to a representative.
What to look for in the best personal loans
If you need to get your hands on some cash within this borrowing ballpark, what are the best personal loans available?
We’ve made it an easy job to compare the loans that could be the best fit for you, by ranking the top providers according to representative APR and the loan terms over which it will apply.
We have also considered early repayment charges, any fees for late or missed payments (more on this below), as well as any other factors that could set one lender even just that whisker apart from the next.
A few points to note before you get started, however:
- There is a very good chance the APR you see advertised will not be the one you are offered. These are ‘representative’ APRs which means they only need to apply to 51% of successful applicants
- Leading personal loans like these are reserved for applicants with good or excellent credit scores. Always use an eligibility checker before applying to see your chances of being accepted. This way, even if you are shown a red flag, your credit score is left intact
- While some lenders don’t charge a penalty fee if you miss a payment, there’s a good chance that your credit score will be negatively affected, which could have much further-reaching implications than paying £12 or even £25.
What are loans for bad credit?
Having a less-than-perfect credit score can lock you out from the most competitive personal loan rates. But that doesn’t mean you can’t get a personal loan.
There are specialist lenders and types of loan that you may be eligible for if you have a bad credit score.
For example, guarantor loans involve getting a family member or friend to co-sign your application, agreeing to step in if you can’t make your monthly repayments. However, interest on these kinds of loans can be more expensive.
The amount you can borrow when you have bad credit is also likely to be less than someone with a higher credit score, while the APR offered to you will be higher.
However, if you make your loan repayments in full and on time, you can rebuild your credit score over time.
You can also check your credit score using a credit referencing agency such as Equifax or Experian to make sure all information is correct and up-to-date.
If you find any errors on your report which could be dragging down your score, you can issue a notice of correction with the agency to straighten things out.
What is a secured loan?
A secured loan is secured against your home. This means if you are unable to keep up with your repayments, you could be forced to sell your home to repay what you owe.
Secured loans often let you borrow larger amounts, and because they are less risky for lenders, they can be cheaper than secured loans.
Interest rates can also be variable so your monthly repayments could change at any point.
What methodology did we use?
To arrive at our star ratings for best loan providers for £7,500 to £15,000 borrowing, assessed the following criteria in order of importance:
- Interest rate: as measured by representative APR (these are fixed)
- Term: the repayment terms available on the listed best representative APR
- Flexibility: whether the lender charges a penalty for repaying the loan in full ahead of the agreed term
- Fees: what late or missed payment fees are charged, if any
- Other factors: we considered other differentiating factors such as payment holidays
How does the Eligibility Checker work?
First of all, you answer a few questions on our site. Next, our Eligibility Checker uses this information to find your credit file and work out how closely you meet the requirements that loan providers have for new customers. We can then give you an indication of how likely you are to be accepted for each loan. The whole thing happens in a flash.
The loan Eligibility Checker and comparison service on our site is provided by Runpath Regulated Services Limited on a non-advised basis. Forbes Advisor has selected Runpath Regulated Services Limited to compare a wide range of loans in a way designed to be the most helpful to the widest variety of readers.
By: Laura Howard
I’ve been involved in personal finance and property journalism for the past 20 years, editing websites and writing for national newspapers. My objective has always been to offer no-nonsense information to readers that either saves or earns them cash.
Source: Compare Our Best Loans Of 2022 – Forbes Advisor UK
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More contents:
- Federal Estate & Gift Taxes: Code & Regulations (Including Related Income Tax Provisions), As of March 2008. CCH. pp. 631–. ISBN 978-0-8080-1853-7.
{{cite book}}:|author2=has generic name (help) - Subsidized Loan – Definition and Overview at About.com. Retrieved 2011-12-21.
- Concessional Loans, Glossary of Statistical Terms, oecd.org, Retrieved on 5/5/2013
- “Average new-car loan a record 65 months in fourth quarter”. Reuters. August 6, 2017. Retrieved 2017-08-06.
- Additionality of government guaranteed loans for SMEs.Journal of Economics and Finance. 45 (3): 504–528. doi:10.1007/s12197-021-09538-8. ISSN 1938-9744.
- The Math Behind Your Home Loan”. The Washington Post.
- “Predators try to steal home”. money.cnn.com. [CNN]. 18 Apr 2000. Retrieved 7 Mar 2018.
- New Rules To Ban Payday Lending ‘Debt Traps'”. National Public Radio. Retrieved 7 Mar 2018.
- “Credit cardholders pay Rs 6,000 cr ‘extra'”. The Financial Express (India). Chennai, India]. 3 May 2007. Archived from the original on January 20, 2019.
- Banks Need Long-Term Rainy Day Funds
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