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Published 12 September 2023
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AA Personal Loans Review: Pros, Cons & Features

AA is a credit broker that offers unsecured loans, which are available to members and non-members. Find out the pros and cons of an AA loan, as well as its key features.

Many or all of the products and brands we promote and feature including our ‘Partner Spotlights’ are from our partners who compensate us. However, this does not influence our editorial opinion found in articles, reviews and our ‘Best’ tables. Our opinion is our own. Read more on our methodology here.

AA states on its website that it is not currently accepting new personal loan applications.

AA personal loans: At a glance 

AA loans – which start at £1,000 and go up to £40,000 – can be used for more than buying a car. You can put the money towards your wedding, home improvements, debt consolidation or plenty of other uses. But remember, if you’re considering a loan it’s sensible to only borrow what you need and to pay it back as quickly as possible based on what you can comfortably afford to repay each month.

While the process of applying for and receiving the loan in your account can take several days, AA offers some perks to both members and non-members who take out a loan with them.

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AA loans pros & cons

Pros

  • You can change your monthly repayment date (but only once per year).
  • You can get an immediate decision.
  • Non-members can get 12 months’ free basic breakdown cover.
  • Existing AA members could be offered a lower interest rate. 

Cons

  • You can face interest charges if you pay off the loan early.
  • You can only get in touch with AA and manage your loan via the phone.
  • You can’t get a joint loan.

The pros and cons featured here are chosen by us based on a combination of our expert opinions from our research of the personal loans market and an exclusive survey of UK consumers conducted on behalf of NerdWallet UK in February 2023 to identify the features of personal loans that people feel are most important. They are unlikely to be the only product features and restrictions that you should consider. Pros and Cons are subjective and you should align them to your own personal circumstances. Information was correct at the time of publication but may have changed since.

AA loans overview

AA does more than breakdown cover. Although it is most associated with motoring, AA can also act as a credit broker for unsecured personal loans provided by the Bank of Ireland UK.

AA is a credit broker, meaning it offers loans to customers but doesn’t provide them directly itself. Its loans are provided by the Bank of Ireland, but AA can offer some extra benefits, such as favourable rates to members and free breakdown cover to non-members.

Depending on your financial situation, you  may be eligible for a loan of up to £40,000. You will need to repay this in fixed monthly instalments over a period of between one and seven years.

Before submitting a formal application, you can see if you qualify for a loan from AA. This is a service offered by most lenders and allows you to see your chances of approval without affecting your credit score.

Amount borrowable£1,000 to £40,000
Term lengthOne to seven years
Time to get a decisionInstant
Time to receive funds once approvedTwo working days (once it has received the signed loan agreement)
Need to have an account with the providerNo
Customer supportPhone
Trustpilot ratingNot available

Where AA loans stand out

You could borrow up to £40,000

You may be able to borrow between £1,000 and £40,000 through AA, which is more than some lenders offer. But you can only take out a loan of more than £25,000 if you don’t already have a loan with AA and meet certain requirements. For example, you won’t be eligible if you are self-employed, earn under £20,000 a year, or want to consolidate debts

Free basic breakdown cover

Borrowers who are not existing AA customers can get  12 months’ basic breakdown cover for free. This policy covers you for one breakdown more than a quarter of a mile away from your home; you would need to pay each time you made any further call-outs. Alternatively, you can also upgrade to a more comprehensive cover at a discount. But don’t overlook the total cost of borrowing on a loan. You should consider the entire package being offered by a range of loan providers to ensure you get the best loan for your situation.

AA members can access lower rates

If you already have breakdown cover with AA, you could qualify for a lower interest rate than if you were a new customer. 

You can choose how overpayments affect your loan

If you make an overpayment on your loan, AA allows you to choose whether this lowers your monthly repayments or reduces your loan term. If you don’t make a choice it will reduce the term of your loan by default. Many other lenders automatically select one of these options, without giving you a choice. Remember to check the terms and conditions before doing this as many providers set limits on overpayments.

Where AA loans fall short

It could take a couple of days to receive funds

AA may not be the best option for you if you need the money quickly. Once your application is approved and you sign your loan agreement, you may need to wait two working days before you get the loan in your account. This is a slower process than other lenders we’ve reviewed that can transfer funds on the same day.

There are not many forms of customer support

Compared to other lenders, AA doesn’t provide you with many ways to get in touch – for example, live chat and email are not an option. You can contact AA via phone if you have a query or want to change your payment date, for example.

You can’t apply for a joint loan

AA only allows you to apply for a personal loan as an individual. This means you can’t apply jointly with a partner or family member, for example.

What type of loans does AA offer?

Unsecured loans

The money for AA loans is provided by the Bank of Ireland. These loans are unsecured, which means you don’t need to put forward any form of collateral, such as your home, to support your application.

Your eligibility for these loans will depend on your credit history and other factors, such as your income, employment status and expenditure. If you qualify for a loan, these will also affect the interest rate you receive.

AA offers loans ranging from £1,000 up to £40,000. You can only apply to borrow over £25,000 if you are a new customer. If you already have an AA loan, you can’t apply to borrow more if it means you would borrow more than £25,000 in total. 

Compared to other lenders, £40,000 is a relatively high maximum loan limit. But, you do need to meet some extra requirements to qualify for a loan of this size.

Repayment terms on AA loans range from one to seven years, which is typical of most lenders.

» MORE: Compare personal loans

Joint loans

AA doesn’t offer joint loans. If you want to apply for a loan with another individual, you will need to consider other lenders. If you take out a joint loan with someone, your credit files will be linked and you’ll both be jointly responsible for paying back the loan. Any missed payments will affect both of your credit scores.

Loans for bad credit

AA only offers loans to individuals with a good credit history, without any county court judgments (CCJs) or bankruptcies on their file. Don’t apply for loans you are unlikely to get because unsuccessful applications will have a negative effect on your credit score.

Depending on your income and other factors, you may still qualify for a loan if you don’t have a perfect credit score. However, you may not be able to borrow as much as someone with a better score and you may face higher interest rates too.

Am I eligible for an AA loan?

To be eligible for an AA loan, you need to:

  • have been a UK resident for at least three years
  • be older than 21 years old at the time of application, and no older than 70 when the loan term ends
  • have an annual salary of at least £12,000
  • not have any CCJs or a history of bankruptcy
  • have a UK-based bank account, or building society account, able to make direct debits

You will also need to pass AA’s credit and affordability checks.

Bear in mind that you won’t be eligible to borrow more than £25,000 if you:

  • are self-employed
  • live with your parents
  • earn under £20,000 a year
  • are a tenant wanting a loan for home improvements
  • want the loan to consolidate debts

AA loan features review

There is nothing particularly unusual about an AA loan, as its features are common to most personal loan products. The main difference is that new AA customers could benefit from free breakdown cover for 12 months and discounted optional add-ons, while existing customers could access lower rates of interest.

Making payments

You repay an AA loan via direct debit in fixed monthly instalments over the agreed time period. Your first payment will go out of your account one month after the loan is paid to you.

If you want to change your repayment date during the loan term, you can call AA to choose a more convenient date for you. But be aware that you can only change your repayment date once per calendar year. Changing your repayment date could cause you to pay more or less in interest depending on how this is calculated.

Overpayments

AA allows you to make overpayments on your loan without paying any penalty fees. You can pay as much or as little as you like, and there is no limit to the number of times you make overpayments during your loan term.

When you make an overpayment, you can choose to either lower your monthly repayments and keep the same loan term, or keep your repayments the same and reduce your loan term. If you don’t say which you prefer, AA will automatically reduce your loan term.

Not all lenders give you this option, as many will automatically shorten your loan term. The fact AA gives you this choice means that you can decide on the option that works best for your situation.

Paying off a loan early

If you can afford to, you can pay off your AA loan in full before the end of the loan term. You will need to contact AA for a settlement figure that will clear your debt.

As with most lenders, AA may charge up to 58 days’ interest to settle your loan. So before you go ahead, you’ll need to check whether clearing your debt early will save you money on interest overall.

Just under half of the respondents to our survey said that being able to settle their loan early without paying any charges was an important feature, but the reality is that most lenders will apply some charges if you want to do this.

» MORE: Paying off a loan early

Additional borrowing

Unlike some lenders, AA may allow you to apply for a further loan, on top of your existing loan. However, you won’t be able to do this if it means you would be borrowing more than £25,000 in total. 

You can apply to borrow more if you have paid off at least 50% of your loan balance or made at least 12 of your monthly repayments.

If you want to borrow more, you could choose to apply for a new loan. This means your existing loan would stay the same, but you would have another loan and another set of repayments in addition to this. This new loan can be at a different rate to your original loan.

Alternatively, you could apply for a new loan that pays off your existing loan and gives you the extra money you need. However, paying off the loan early could incur the 58 days’ interest as an early repayment fee and the interest rate on your new loan may differ from your existing rate.

Any additional borrowing is likely to be assessed using your circumstances at the time of application rather than those you provided initially.

Customer support

Customers can only get in touch with AA via phone if they have a problem or want to ask a question about their loan. For example, you will need to call AA if you want to change your repayments or settle your loan early.

Unlike many other lenders, AA doesn’t offer a live chat function or a contact email. It also doesn’t provide a mobile app or online account that can make it easier to manage your loan.

You can ask for help on AA’s X (formerly Twitter) account, but the team is likely to direct you to a phone number to help with your query.

Customer ratings

Trustpilot reviews aren’t available for AA as it is a loan broker.  But in review site Fairer Finance’s ratings of personal lenders, AA comes in around the middle of the pack. It has an overall customer experience rating of 60%, compared to the top lenders which have a rating of 70% or more.

This information is correct as of 4 September 2023.

How can I apply for an AA loan?

AA offers a loan calculator that allows you to change the loan amount and repayment term to see how much your monthly repayments would be. Bear in mind that this is based on the representative annual percentage rate (APR), so you may be charged a different rate.

If you know how much you want to borrow, you can check your eligibility for a loan before formally applying. This involves a soft credit check which won’t affect your credit score. After you’ve provided all the necessary information, AA will tell you how likely you are to be approved for a personal loan.

It’s only if you decide to apply for a loan that AA will conduct a hard credit check. This will be recorded on your credit history. 

If AA accepts your application, you will need to sign your loan agreement. You may be able to do this online but, in some cases, it may be sent by post.

You could also consider using an alternative loans eligibility service to conduct a soft search across multiple lenders and provide you with results of your likelihood of a successful application against several different loans, without affecting your credit score. But do check the details of the service you use, to make sure it only uses soft searches and how many lenders it checks

What information do I need?

To apply for a loan, you will need to provide AA with some personal details and information about your finances, including:

  • your name, address and date of birth
  • what you plan to use the loan for
  • your income and regular expenses
  • your employment status
  • whether you are an AA member

How long does it take to apply?

You may be able to get a decision instantly online, but sometimes AA may require more information. If this is the case, it will contact you within five days by post.

Once you have been approved, AA will send your loan agreement to sign. You may be able to do this online but, if not, AA will send your loan agreement to you by post. Once AA has your signed agreement, the money should be in your account within two working days.

AA loan frequently asked questions

What is an AA loan?

AA is a credit broker, not a direct lender. An AA loan is actually provided by the Bank of Ireland UK. So when you apply for an AA loan, keep in mind that the lender you are borrowing from is the Bank of Ireland UK.

How long do AA loans take to process?

Your AA loan application may be approved instantly, unless AA requires further information. However, it can take several working days before the funds arrive in your bank account.

Review methodology

At NerdWallet UK, we base our reviews and our ‘Best’ pages on the results of surveys we undertook about what was important to people who use these products. This allows us to look at products impartially of any commercial arrangements we have and fairly rate the products on the same set of criteria.

Best means our ‘Best’ and is based only on what products we have aligned to our surveys, which form the basis of our reviews and ratings. This means that there will be other products on the market that we have not included in our ‘Best’ pages. Best does not mean it’s best for you, nor does it mean the ‘cheapest’.

Our reviews may display lenders’ rates. This additional information has not been included in our evaluations but is still very important when choosing a product. Rates offered can depend on circumstances, amount and term. Always check details before proceeding with any financial product.

Product details reflect the information that was available at that time but may have changed since. We strive to give you a review on as many products as possible, but there will be products not included on the market. The review is our opinion, but it does not constitute advice, recommendation or suitability for your financial circumstances.

You can view our full review methodology here.

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