Compare Low APR Unsecured Loans

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  • Mark's and Spencer logo
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What our Nerds say about low APR unsecured loans

Your credit score will prove important in the rate you’re offered, but with the unsecured loans that you’ll find here, you could get a cheaper loan without needing to provide anything that you own as security. You simply borrow the money and make fixed repayments each month for an agreed period of time until your loan, plus the interest you must pay, is fully paid back.

Tim Leonard Lead Writer at NerdWallet

What types of loans offer the lowest interest rates?

If you need to take out a loan, one of the biggest factors to consider is the interest and APR rate. Those rates will determine the size of your monthly repayments and what the loan costs you overall.

With an unsecured loan, as you’ll find above, your personal credit rating and the time you’ll take to repay the loan are key in determining the rate you’ll pay. Come with an excellent credit score and the best low interest loans could be available to you. And, broadly speaking, the longer the term of the loan, the lower the interest rate you’ll usually pay (whilst remembering that extending the term of a loan will increase the overall cost).

» MORE: Short-term loans vs long-term loans

Finding a low interest loan

There may be significant differences in the interest rates charged by various lenders. So when looking for low interest loans, it’s important to do your research and see how different products from different lenders compare. Just applying for an unsecured loan from a bank because you already have a current account with them is not a great idea.

If you’re looking for a low interest personal loan, the table on this page is a good place to start.

How to get a cheaper loan

When it comes to personal loans, the lowest rates are reserved for borrowers with the best credit scores. The less risk you represent to a lender, the better the rate of interest they’re usually willing to offer. Because of this, it's always worth ensuring your credit score is in the best shape possible before you apply.

» MORE: Ways to improve your credit score

Can I get a lower interest rate on my loan?

It’s not possible to lower the interest rate on a loan which you have already taken out. But if you make your repayments on time and your credit score improves, it may mean that the next time you need to borrow, you will qualify for a lower rate of interest.

What types of loans are available?

Before committing to an unsecured loan, you should check for other alternatives first. For instance, a 0% purchase credit card could be a better way to borrow if you pay back what you borrow before the interest-free period runs out.

And while it’s possible to use a personal loan to buy a car, there are other types of car finance that may prove more suitable for you too, though not necessarily cheaper.

» COMPARE: Car finance

If you’re willing to provide something you own as security against what you borrow, a secured loan could be worth considering, particularly as the collateral means they tend to result in cheaper loan rates in comparison to unsecured loansThat said, they do come with a higher risk to the borrower as their asset, usually a home is at risk if they fail to meet repayments.

» COMPARE: Secured loans

The pros and cons of using an unsecured loan

As with any form of borrowing, there are advantages and disadvantages to unsecured loans that all borrowers should be aware of, particularly when compared with secured loans.

Advantages of unsecured loans

  • You can borrow without needing to put an asset up as security.
  • This can also make for a quicker and easier application process.

Disadvantages of unsecured loans

  • You may not be able to borrow as much as you can with a secured loan.
  • Interest rates may be higher as lenders consider the lack of collateral a higher risk.

» MORE: How unsecured loans compare with secured loans

Are cheaper loans best for me?

While finding a low interest loan is always important, a number of other factors should also be considered when working out which loan is best for you. These might include:

  • Affordability – will your repayments be manageable?
  • Fees - are there any arrangement fees you’ll need to pay upfront or charges for repaying your loan early?
  • Credit score – the credit check run by lenders when applying could impact your credit score, as could being late with or missing payments.
  • Repayment term - a longer term can keep monthly payments affordable, but you’ll pay more interest in total.
  • Overall cost – with fees and interest, what will you repay in total over the entire term?
  • Payment breaks - is there the option to skip payments and what happens if you do?

How can I find a cheap loan at NerdWallet?

Finding a loan is easy with our comparison table). Simply choose how you would like to sort the unsecured loans – either by representative APR, brand name, available loan amount or term, and the table will reorder accordingly.

With each unsecured loan listed, you’ll still see all of the above, plus a representative example giving you an idea of the monthly payments you’d have to make in specific circumstances. Click on ‘More info’ and the eligibility criteria that you’ll need to meet to take out the loan also appears.

If you think a particular loan fits the bill, click on ‘Check Eligibility’ to find out how likely an application for this loan would be successful against your personal credit score. This is called a soft search and keeps your credit profile intact prior to any decision to proceed to a full application.

Low interest loan FAQs

What is the difference between a secured and unsecured loan?

To take out a secured loan, you must provide an asset as security against what you borrow – this might be your home, or maybe car. Lenders then know they have a way of recouping their money – by making you sell this asset – if you fail to pay back the loan. With an unsecured loan, such collateral isn’t required.

How can I get the cheapest loan rates?

With an unsecured loan, the very best low APR loans are usually only available to those who have an excellent credit score.

» MORE: What is a good credit score?

Can I get a low interest loan with bad credit?

While it’s unlikely you’ll be able to secure the very lowest loan rates if you have bad credit, there’s still a decent chance that you’ll be able to get a loan, just at a higher interest rate.

Can I pay my loan back early?

Yes, you will be allowed to pay your loan back early, although there may be an early repayment charge for doing so – check your terms and conditions to find out.

For loans taken out since 1 February 2011, it’s also possible to overpay by up to £8,000 a year without incurring a charge. It’s only if you overpay by more, and your lender has incurred a cost because of this, that you may be charged a fee.

» MORE: How to pay a loan back early

What is the cheapest way to borrow money?

With a 0% purchase credit card, it’s possible to borrow and not pay any interest for the interest-free period it offers. The huge ‘but’ here is that if you fail to pay everything you borrow back before the 0% period ends, the interest and charges could then quickly start to rack up (unless you switch to a 0% balance transfer card).

» COMPARE: 0% purchase credit cards

What factors impact the cost of a loan?

The interest rate you’ll be offered, and the cost of the loan, will generally depend on the loan amount you’re taking out, the term over which you intend to repay your loan, and your credit score.

What is APR?

APR, or the annual percentage rate, is the term used which brings together all the costs of the loan in the first year. This includes the interest rate and any initial fees. It is a regulatory requirement that loan providers provide you with this and is designed to make it easier to compare different loan options.

» MORE: Learn about loans and APR

How might low-APR unsecured loans vary?

The APR on loans can vary greatly and typical low-APR loans can also vary. The APR on offer will be based on the amount and term the loan will be over, along with many other factors.

Will APR be higher if I wish to borrow more money?

The APR on an unsecured loan will depend on the amount you wish to borrow and the duration of time you need the loan for. You will most likely find that lenders expect you to pay a higher level of APR for smaller unsecured loan amounts.

Can I extend the length of my low-interest unsecured loan?

You can not extend the term of a loan agreement once it has been opened - although you can cancel it within a cooling off period. Before you take out the loan you can consider longer durations to lower the monthly repayments. However, this will result in a greater number of monthly instalments, which in turn will result in more interest being payable over time. Before agreeing to any loan, get a quote and make sure you’re able to afford it. Also keep in mind how the duration of the loan will affect the overall sum you end up paying to the lender.

Will I lose collateral if I make late payments on my low-interest unsecured loan?

As this type of loan is unsecured, your low-interest loan will not require collateral. However, your lender is still legally entitled to seek to retrieve the money they are owed if you fail to make the necessary repayments via other means, such as through the courts.

What penalties could I face for failing to repay an unsecured loan?

Not repaying your loan may result in:

  • Damage to your credit profile.
  • Greater difficulty in securing other types of credit.
  • Fees and penalties being charged on top of what you already owe.

And in more serious circumstances, could lead to:

  • Sequestration, where you hand assets over to a trustee who sells them to ensure the lender gets their money back
  • The lender seeking a County Court Judgement, which could be placed on your credit record for up to six years, further restricting your ability to seek credit.

» MORE: What could happen if you don’t meet your loan repayment

About the author

Tim Leonard
Tim draws on 20 years’ experience at Moneyfacts, Virgin Money and Future to pen articles that always put consumers’ interests first. He has particular expertise in mortgages, pensions and savings. Read more

Some examples

Here are some examples from UK loan providers that you can compare using the Monevo eligibility service:

    Shawbrook Personal Loan logo

    Shawbrook Personal Loan

    • Representative APR
      14.7% APR
    • Available Amounts
      £1,000 to £35,000
    • Min / Max Terms
      1 to 7 years
    Representative Example: Representative APR 14.7% (fixed). Based on a loan of £10,000 over 60 months at an interest of 14.7% p.a. (fixed). Monthly repayments of £231.62. Total amount payable £13,896.65. Maximum APR: 29.9%.
    More info
    • Broker
    Post Office Money Personal Loan logo

    Post Office Money Personal Loan

    • Representative APR
      14.9% APR
    • Available Amounts
      £1,000 to £25,000
    • Min / Max Terms
      1 to 7 years
    Representative Example: Representative APR 14.9%. Based on a loan of £4,000 over 36 months at an interest rate of 14.9% p.a. (fixed). Monthly repayments of £136.65. Total amount payable £4,919.47. Maximum APR: 29.9%.
    More info
    Admiral Personal Loan logo

    Admiral Personal Loan

    • Representative APR
      14.9% APR
    • Available Amounts
      £1,000 to £30,000
    • Min / Max Terms
      1 to 8 years
    Representative Example: Representative APR 14.9%. Based on a loan of £10,000 over 60 months at an interest of 13.97% p.a. (fixed). Monthly repayments of £232.53. Total amount repayable before £13,951.80. Maximum APR: 39.9%.
    More info
    • Peer To Peer
    Zopa Personal Loan logo

    Zopa Personal Loan

    • Representative APR
      19.9% APR
    • Available Amounts
      £1,000 to £25,000
    • Min / Max Terms
      1 to 5 years
    Representative Example: Representative APR 19.9%. Based on a loan of £10,000 over 60 months at an interest of 19.9% p.a. (fixed). Monthly repayments of £255.50. Total amount payable £15,329.80. Maximum APR: 34.9%.
    More info
    Oakbrook Personal Loan logo

    Oakbrook Personal Loan

    • Representative APR
      19.9% APR
    • Available Amounts
      £1,000 to £10,000
    • Min / Max Terms
      1 to 5 years
    Representative Example: Representative APR 19.9%. Based on a loan of £5,000 over 48 months at an interest of 19.9% p.a. (fixed). Monthly repayments of £147.71. Total amount payable £7,090.08. Maximum APR: 34.9%.
    More info
    My Community Finance Personal Loan logo

    My Community Finance Personal Loan

    • Representative APR
      23.0% APR
    • Available Amounts
      £1,500 to £25,000
    • Min / Max Terms
      1 to 5 years
    Representative Example: Representative APR 23.0% (fixed). Based on a loan of £4,500 over 48 months at an interest of 23.0% p.a. (fixed). Monthly repayments of £139.66. Total amount payable £6,703.57. Maximum APR: 23.0%.
    More info
    Abound Personal Loans logo

    Abound Personal Loans

    • Representative APR
      24.8% APR
    • Available Amounts
      £1,000 to £10,000
    • Min / Max Terms
      1 to 3 years
    Representative Example: Representative APR 24.8%. Based on a loan of £2,000 over 36 months at an interest of 24.8% p.a. (fixed). Monthly repayments of £76.75. Total amount payable £2,763.00. Maximum APR: 24.8%.
    More info
    BetterBorrow Personal Loan logo

    BetterBorrow Personal Loan

    • Representative APR
      27.3% APR
    • Available Amounts
      £1,000 to £12,000
    • Min / Max Terms
      1 to 5 years
    Representative Example: Representative APR 27.3%. Based on a loan of £5,000 over 42 months at an interest of 27.3% p.a. (fixed). Monthly repayments of £178.12. Total amount payable £7,480.93. Maximum APR: 39.8%.
    More info
    KOYO Personal Loan logo

    KOYO Personal Loan

    • Representative APR
      29.9% APR
    • Available Amounts
      £1,500 to £12,000
    • Min / Max Terms
      6 months to 5 years
    Representative Example: Representative APR 29.9%. Based on a loan of £6,000 over 48 months at an interest of 26.45% p.a. (fixed). 47 scheduled monthly payments of £205.09 and a final payment of £204.75. Total amount payable £9,843.98. Maximum APR: 34.9%.
    More info
    • Only available to homeowners
    Oplo Personal Loan logo

    Oplo Personal Loan

    • Representative APR
      30.8% APR
    • Available Amounts
      £2,000 to £15,000
    • Min / Max Terms
      2 to 6 years
    Representative Example: Representative APR 30.8%. Based on a loan of £6,915 repayable over 47 months at an interest rate of 13.92% pa (fixed). 46 monthly payments of £240.33 and a final payment of £240.33. Total amount payable £11,295.71. This includes an acceptance fee of £395. Maximum APR: 30.8%.
    More info

If you are thinking of consolidating existing borrowing you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.

Our service is free of charge but we receive commissions from the providers we refer you to. This table is initially ordered by representative APR. You can use the options above the table to order it according to various criteria. You may be offered different rates depending on your personal credit rating.

Our comparison service features a selection of providers from whom we receive commission.

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