💷 Calculate Your Repayments
🔄 Loan Comparison
Compare two loan options side by side
📊 Common UK Loan Rates (March 2026)
Typical APR ranges — actual rates depend on your credit score, income, and lender.
🏦 Personal Loan
£1K-£25K • 2.8%-29.9% APR
Best rates for £7.5K-£15K, 1-5 years
🚗 Car Finance (HP)
£3K-£50K • 4.9%-14.9% APR
Hire Purchase, you own the car at end
🚗 Car Finance (PCP)
£3K-£50K • 5.9%-12.9% APR
Lower monthly, balloon payment at end
💳 Credit Card
£100-£10K • 18.9%-39.9% APR
0% balance transfer deals: 12-28 months
🏠 Home Improvement
£5K-£25K • 2.8%-7.9% APR
Personal loan, unsecured, 1-7 years
💍 Wedding Loan
£5K-£25K • 3.5%-9.9% APR
Same as personal loan, different marketing
🎓 Postgraduate Loan
Up to £12,471 • Plan 3 • RPI+3%
Repay 6% over £21,000 threshold
🏗️ Buy Now Pay Later
Varies • 0%-39.9% APR
Klarna/Clearpay: often 0% if paid on time
💡 How Loan Interest Works
APR vs Flat Rate
APR (Annual Percentage Rate) includes all fees and reflects the true cost. Flat rate calculates interest on the full original amount — making it look cheaper but costing the same or more. Always compare using APR. A 6% flat rate on a 3-year loan is roughly equivalent to 11.5% APR.
The Monthly Payment Formula
For a repayment loan: M = P × [r(1+r)^n] / [(1+r)^n - 1]
Where P = principal, r = monthly interest rate (APR ÷ 12), n = number of months. This is the amortisation formula — early payments are mostly interest, later payments are mostly capital.
Why Overpayments Matter So Much
On a £10,000 loan at 6.9% APR over 5 years, adding just £50/month extra saves you £340 in interest and pays off the loan 11 months early. The effect is even more dramatic on larger loans and higher rates. Every extra pound reduces the balance that interest is calculated on.
The Sweet Spot for Personal Loans
UK lenders typically offer the best rates for loans between £7,500 and £15,000. Borrowing exactly £7,500 instead of £7,000 can actually reduce your APR by several percentage points — saving you money overall despite borrowing more. Check your lender's rate bands.
Early Repayment Charges
Under UK Consumer Credit Act, you have the right to repay any personal loan early. Lenders can charge up to 1% of the outstanding balance (or 0.5% if less than 12 months remain). No charge if less than £8,000 is repaid in a 12-month period. Car finance (HP/PCP) may have different early settlement rules — always request a settlement figure.
🛡️ UK Consumer Protection
- Section 75: Credit card purchases between £100-£30,000 are protected — if the seller goes bust or goods are faulty, the card company is jointly liable
- 14-day cooling off: You have 14 days to cancel any credit agreement without penalty
- Affordability checks: Since 2014, all UK lenders must verify you can afford repayments
- Unfair relationships: Courts can rewrite credit agreements deemed unfair to the borrower
- Financial Ombudsman: Free dispute resolution if your lender treats you unfairly
- Credit score: Soft searches for quotes don't affect your score — only full applications
📱 Tips Before Taking a Loan
- Check your credit score free — ClearScore, Credit Karma, or Experian (free tier). Fix errors before applying
- Use eligibility checkers — MoneySuperMarket, Compare the Market. Soft search = no credit impact
- Compare total cost, not monthly — a lower monthly payment over longer = more total interest
- 0% credit card first — for purchases under £5K, a 0% purchase card often beats a personal loan
- Avoid payday loans — APRs of 1,000%+. Even a credit card at 39.9% APR is vastly cheaper
- Ask your bank first — existing customers often get preferential rates not shown on comparison sites
- Never borrow to invest — unless it's a mortgage. Investment returns are never guaranteed