Personal Loans in the UK: Lowest Interest Rates (2026)
When people talk about “low‑interest personal loans,” they usually mean unsecured loans where the APR (Annual Percentage Rate) is as low as possible for everyday borrowing like car costs, debt consolidation, or home improvements.
Important: The rate you actually get depends on your:
Credit score
Income & affordability
Loan amount
Term (how long you take to repay)
Advertised examples are representative — meaning at least 51% of applicants receive that rate, but individual offers can differ. �
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🔎 1. Lowest Representative APRs (Best Deals in 2026)
Based on recent comparisons of personal loan deals in the UK:
🟢 Top Low‑Interest Options
Typical Representative APR
Lender
Loan Size Range
Notes
TSB Personal Loan
~5.6% APR
£7,500–£15,000
Among lowest for good credit applicants. �
finder.com
Nationwide Building Society
~5.6% APR
£7,500–£25,000
Competitive for existing members. �
finder.com
M&S Bank Personal Loan
~5.7% APR
£7,500–£25,000
Fixed rate over typical 1‑7 year term. �
finder.com
Tesco Bank (Clubcard)
~5.8% APR
£7,500–£35,000
Slightly better for Clubcard members. �
finder.com
TSB / Santander
~5.9% APR
£7,500–£25,000
Also low around this bracket. �
finder.com
These rates are among the lowest available in the UK market right now — and tend to apply when you have a good credit history and regular income. �
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💡 Tip: For smaller loan amounts (e.g., under £5,000), rates tend to be higher than the numbers above. Lenders often price small loans significantly above those lowest APRs. �
Money To The Masses
📌 2. How Representative APR Works
Representative APR reflects the rate that at least 51% of successful applicants receive — not a guaranteed rate for everyone. �
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Your personal offer may be higher or lower based on your credit profile and income.
Always check the full terms before committing.
🧠 3. Examples by Loan Size
Here’s how some of the lowest rates compare for typical loan sizes:
💷 £10,000 Loans
Provider
Rep APR
Term Options
Notes
M&S Bank
~5.7%
1–7 yrs
Competitive fixed rate. �
Money To The Masses
Tesco Bank
~5.8%
1–10 yrs
Often best for Clubcard holders. �
Money To The Masses
TSB
~5.9%
1–7 yrs
Solid low‑rate option. �
Money To The Masses
Santander
~5.9%
1–5 yrs
Mid‑tier low rate. �
Money To The Masses
💷 £5,000 Loans
Lower personal loan amounts do usually come with higher APRs, but some lenders still compete:
Tesco Bank & M&S often have lower rates around ~6.9% APR on £5,000 size loans. �
Money To The Masses
📌 Note: Smaller loans (<£5,000) may have APRs closer to 9–10% or higher from many lenders. �
MoneySavingExpert.com
📊 4. What Affects Your Interest Rate
➤ Credit Score
A higher score usually unlocks the lowest advertised APRs.
Lower scores often result in higher rates or rejection. �
UK Startup Magazine –
➤ Loan Amount & Term
Higher loan amounts (e.g., £10k+) often qualify for lower APRs
Longer terms reduce monthly payments but can increase total interest cost. �
UK Startup Magazine –
➤ Lender’s Criteria
Some lenders offer better deals only to existing customers or holders of related products (e.g., Clubcard members with Tesco). �
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🧾 5. Pros and Cons of Low‑Rate Personal Loans
✔ Pros
Predictable fixed monthly payments
Often cheaper than credit cards or overdrafts
Good for consolidating debt or financing large purchases
✘ Cons
Cheapest deals are often limited to those with strong credit
APR doesn’t always include early repayment fees — check before signing
🔍 6. Tips for Getting the Best Rate
💡 Check eligibility first — using prequalification tools can show likely rates without affecting your credit score. �
MoneySavingExpert.com
💡 Improve your credit score by reducing credit utilisation and paying on time — which can help you qualify for the lowest APR offers.
💡 Borrow what you need — sometimes bigger loans get lower rates, but only if you actually need the money and can afford repayments. �
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📌 Summary: Best Low‑Interest Personal Loans (UK 2026)
Approx. Representative APR
Provider
Best For
TSB
~5.6% – 5.9%
Good credit borrowers
Nationwide BS
~5.6%
Existing members & regular savers
M&S Bank
~5.7%
Longer terms available
Tesco Bank (Clubcard)
~5.8%
Members with Clubcard
Santander
~5.9%
Competitive mid‑tier lender
These are generally some of the lowest representative rates available on unsecured personal loans in the UK right now — but your actual rate depends on eligibility and credit profile. �