How to compare personal loans in the UK
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Quick answer: Compare personal loans on total cost (APR plus fees), early repayment terms, loan term length and whether the lender uses a soft eligibility check — not monthly payment alone. Representative APR applies to only 51% of approved borrowers; your rate may be higher.
Personal loans are regulated consumer credit. Comparison sites aggregate quotes, but total cost depends on your credit tier, loan amount and term. This hub explains fair comparison — information only, not a recommendation to borrow.
Last reviewed:
Read the full credit cards & loans guide →Quick answer: Compare personal loans →Primary source: www.fca.org.uk/consumers/loans
APR, fees and total cost
APR includes interest and mandatory fees spread across the term. A lower monthly payment over a longer term often costs more total interest.
Arrangement or product fees added to the loan increase total cost even if APR looks competitive.
Compare at identical loan amounts and terms — a £10,000 over three years quote is not comparable to five years.
Eligibility and credit searches
Use soft-search pre-qualification tools before applying. Each hard application records on your file for 12 months.
Credit utilisation and recent applications affect acceptance. Space major borrowing applications where possible.
Debt-to-income ratio influences underwriting — lenders stress-test affordability under FCA rules.
Secured vs unsecured and early repayment
Unsecured personal loans need no collateral — typical for £1,000–£25,000 over one to seven years.
Secured homeowner loans tie debt to property — failure to pay risks repossession after court process.
Regulated loans may charge up to two months' interest for early settlement — factor in if you may clear early.
Common questions
Is a personal loan cheaper than a credit card?
For fixed borrowing over 12+ months, loans often beat carrying card balances at standard APR. 0% card promos can win for shorter disciplined borrowing.
Can I pay off a loan early?
Yes on most regulated loans, but early settlement charges may apply. Ask for a settlement figure before paying lump sums.
Do comparison sites show all lenders?
Panels vary. Some lenders only lend direct. Check at least one comparison site and one direct lender if you want full market coverage.