But you only have until the end of the month to take advantage of this great offer.
Let’s take a closer look at the deal.
What’s the deal?
The AA is offering consumers looking to borrow between £7,500 and £15,000 over two to five years an enticingly low representative APR of 4.1%.
With every loan, the motoring organisation also gives you 12 months’ free AA Breakdown Cover, or the option of a half-price upgrade to the Home Start, Relay or Stay Mobile packages for existing AA customers.
And if you apply for the deal through MoneySuperMarket, you also get a £20 fuel voucher – valid at Shell service stations around the country – thrown in.
This offer is only available exclusively on MoneySuperMarket until July 31.
Who is it good for?
This deal is aimed at motorists looking for a low-cost cash injection with added benefits.
It is a great offer for anyone considering taking out breakdown cover, which is worth around £40 a year, while the £20 petrol voucher makes it an extra sweet deal for all drivers.
You must be aged between 25 and 70 to qualify for this deal, which is also only available to those who earn at least £12,000 a year.
The headline rate of 4.1% is also only available on loans of between £7,500 and £15,000.
And if you have a less-than-perfect credit score, you may be offered a higher rate.
The free breakdown cover provided is also only valid for roadside assistance, meaning that you will not qualify for help if your car breaks down at your home.
What’s the verdict?
Low personal loan rates make this the perfect time to get your hands on some extra cash without paying through the nose for it.
And even though the AA rate is highly attractive, there are cheaper personal loans available.
Existing HSBC customers, for example, can benefit from a loan rate of just 3.9% on £7,500-£15,000 loans, as can Sainsbury customers who have a Nectar card. The supermarket is offering a rate of 4% to those who don’t have its loyalty card.
These Sainsbury deals are available until 22 July.
Tesco Bank and Hitachi Personal Finance are currently advertising representative APRs at 4.1% too.
Total cost considerations
The total cost of borrowing £10,000 over five years at 3.9% would be £1,022.86, compared to £1,049.91 at 4.0% and £1,077.01 at 4.1% - the AA rate.
Assuming the AA’s annual breakdown cover is worth about £40, and factoring in the £20 fuel voucher, this means that the AA deal dips under the 3.9% rate.
For non-Nectar cardholders paying the 4% required by Sainsbury, the £60 combined benefit of the free breakdown cover and the £20 petrol voucher makes the AA loan an even better choice.
Over two years, meanwhile, the total cost of borrowing £10,000 at 3.9% is £411.30, versus £432.67 at 4.1%. That makes the AA deal with its £60 worth of benefits better value than the Nectar loan over this period.
Here’s a table showing the total interest you’d pay if you borrowed different amounts over five years at different interest rates, and with the AA benefits factored in.
Total interest paid on a 5-year personal loan
Amount borrowed over 5 years (£)
AA 4.1% (inc. £60 reduction)
Sainsbury's 4% Non Nectar cardholders
HSBC or Sainsbury's 3.9% (Existing customers/Nectar cardholders
Please note: any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.