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1Accurate as of February 2024
MoneySuperMarket's loan calculator is designed to give you an idea how much a personal loan is going to cost.
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A personal loan is simply a way of borrowing money that you’re required to pay back over an agreed period with interest. Knowing where to get the best deal can be difficult, so we’ll compare a broad range of personal loans from across the market to find the right fit for you.
Quick access to money: You’ll have the money within days of being approved – so you can make your purchase or consolidate your debts quickly
Flexible repayments: You can choose how long you need to pay back the debt, with terms that range from a few months to five years or longer
Rebuild your credit score: A personal loan can help to build your credit score if you make sure to meet your monthly repayments
Higher interest rates: Interest rates on your repayments are often higher when a loan is not secured against collateral, making it more expensive overall
Hard to borrow with poor credit: If your credit score is low, or you’ve defaulted on other debts in the past, you might not be approved for an unsecured loan
Penalties if you default: There are big implications if you miss repayments or stop them altogether. This can include a negative impact on your credit file and legal action by lenders
The cost of a personal loan will depend on a few factors including how much you borrow, at what interest rate and how long you take to pay it off.
We’ve calculated the total cost of borrowing £10,000 over different periods and at different interest rates. You can also see how much the monthly repayments might be for each deal
As the table shows, the advantage of extending the loan over a longer period is that monthly repayments can be more affordable, but you will end up paying more overall for the loan.
Our example assumes that you don’t incur any fees for late or missed payments and doesn’t factor in any early repayment charges should you wish to clear the balance early.
You can work out the total cost and monthly repayment figures for different loan amounts with our personal loan calculator.
Table showing monthly repayment on a £10,000 loan.
Table showing total amount repayable on a £10,000 loan
Borrowing has become more expensive in recent times due to rising interest rates. This makes it even more important to try to secure a competitive deal to keep repayment costs down.
Shop around. Compare deals from a range of lenders from across the market. You should also be shown your chances of being accepted for each loan.
Consider a secured loan. If you’re prepared to put down collateral in case you default on the loan then you may be able to secure a better interest rate with a secured loan.
Improve your credit score. Check your credit rating and fix any errors that could mean your application is denied. You can also get tips on how to improve your score.
It can be cheaper to borrow more. Don’t borrow what you can’t afford to pay back, but check to see whether borrowing a little more moves you into a lower APR bracket.
Check the terms. Make sure the loan you’re offered suits your personal circumstances including if you want to pay it off early or are concerned about missing payments.
It’s possible to get an unsecured personal loan even if you have struggled with debts in the past and you’ve got a low credit score, but it’s unlikely you’ll be offered the best deal. There are a number of lenders who specialise in bad credit loans, but you may be asked to pay a higher interest rate or you won’t be able to borrow as much as you would like.
A personal loan can be a great financial tool if you need a lump sum of money. This could be for consolidating existing debts, paying for a new car, or for home improvements. You generally don’t need to secure the loan against any existing assets, and you’ll be told from the start how much your monthly payments will cost and how much interest is being charged. Just remember that the personal loan market is competitive, so never stick with the first offer you’re given and take your time to compare all of the loans on offer before applying."
You won’t need many details to apply for an unsecured personal loan. You’ll typically be asked for proof of:
Identification, such as driving licence or passport
Address (for example on a recent utility bill)
Income (on your payslip).
A lender will then perform background checks on your credit history and let you know if you’re eligible.
While many personal loans are taken out to buy a car, car finance is a broad term used to explain the different ways you can purchase or lease a vehicle. For more information on financing a car, take a look at our guide on how car finance works.
You can repay your unsecured personal loan early, but you might incur an early repayment charge. While you’ll save on interest repayments if you clear the debt, you should factor this against how much you’ll be penalised for paying off the loan ahead of schedule. Look out for early repayment charges before taking out a loan because your financial circumstances will invariably change over time.
Personal loans are useful if you need cash in the short-term to make a substantial purchase you might otherwise be unable to afford – or you don’t have the time to save up.
You have to be able to prove to the lender that you'll be able to meet your repayment responsibilities. If you're not sure you can make your monthly repayments, a personal loan may not be for you.
People with a good credit rating can often find credit cards offering long periods interest-free, so if you always meet your minimum monthly repayments, a credit card will be a cheaper way to borrow money. If you need several thousand pounds, a personal loan may be a better bet – albeit more expensive.
The amount you’ll be eligible to borrow will depend on your personal circumstances and credit history, but it’s usually only up to £25,000 on an unsecured loan.
The length of your loan can vary depending on the type of loan and the provider you choose, but it could be anywhere between one and 10 years. Taking out a loan for a longer period of time may reduce your monthly repayments, but you’ll end up paying more in interest overall.
You’ll need a good credit score to be accepted for the most competitive loans with the lowest interest rate (APR), but some providers offer loans designed for people with poor or no credit. For example, you can get guarantor loans, in which someone else commits to make your repayments if you can’t.
A soft search or soft application is a way of finding out where you stand in terms of getting a loan without leaving a mark on your credit report. It’s a way to find out if you’re eligible for a loan without harming your chances of being accepted.
Missing repayments can mean extra charges and interest from your lender, and it could also bring to an end any low-interest or zero-interest rate deals you have. You may also see your interest rate increase.
APR, or your Annual Percentage Rate, is the interest rate at which you pay back money you’ve borrowed. It takes into account the actual interest rate you pay, plus any other fees or charges involved in the deal, to give you a more complete picture of what your loan will cost.
When you see a rate advertised as the representative APR, this means the lender is required to offer this rate to at least 51% of applicants – however it doesn’t mean you’re guaranteed to receive this interest rate yourself.
Whether you can get a personal loan with a low APR depends on a few factors such as your credit rating and affordability to meet repayments.
The better your credit score, the higher your chances of securing a lower APR, but ultimately it will be up to the lender to decide.
If you’re worried you can’t meet your monthly loan repayments you should contact your lender to see whether they can help work out a solution.
This might include extending the loan term so you pay less each month or taking a payment holiday so you have a chance to repair your finances.
Other options include debt consolidation and seeking support from dedicated debt charities.
Read our guide on what to do if you’re struggling to repay your loan for more information.
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