Types of small loan
Almost everyone’s definition of a small loan is different but for the purpose of this page, we’re calling small loans anything from £200-£1000.
You’ll find a very broad range of lenders on this page offering loans with contrasting requirements, varying rates and different repayment periods. However, each of the lenders listed in this table fall into one of the following categories.
Bank loans lend in this range, however, rates will differ dependent on how much you borrow and the period over which you repay. Beware that the rate advertised may not be the final rate you'll receive. Every bank loan featured here is a straight instalment loan with no security required, however, some lenders in this bracket may ask for you to be a homeowner to get access to their lower rates of interest.
Nearly all of the main high street supermarkets have been granted banking licences and are offering unsecured instalment loans to customers with good credit profiles. Rates will range from single figures up into the mid-teens dependant on how much you borrow with repayment periods ranging from one to five years.
Peer to peer
Peer to peer lenders connect savers with potential borrowers, offering competitive rates of interest to both. Loan amounts, repayment period and interest rates are all pitched at similar levels to banks loans and supermarket loans.
Guarantor lenders offer small loans to those with a bad credit history. If you’ve got someone who’s willing and able to back your loan application, then a guarantor loan could be a suitable option worth considering. We’ve included them in the comparison table below.
What not to do
Do not apply for a small loan through a site that is not regulated by the FCA. There are a number of brokers, lead generators and "ping trees" out there who advertise small loans who do not actually provide them. They will instead take an extensive application from you, send your details to as many lenders as possible and more than likely, sell your details to multiple spammers or cold callers who'll text and phone you incessantly offering to reclaim that PPI that you've never had.
Choose Wisely WILL NEVER sell your details to any spammers or cold callers, we DO NOT charge you to compare small loans and you're under absolutely no obligation to take out a loan if you compare them using this table.
High-cost short-term loans
High-cost short-term loans (HCST) , as their title suggests, are loans designed to be repaid over a short term. Loan amounts generally range from £200 to £1000, often with repayment terms of up to 6 months.
HCST loans sit at the pricier end of the scale and should be considered for use only as a last resort. If you are thinking of a HCST loan be sure to compare your options first and be absolutely positive you can afford the repayments before you apply.
Pricing and things to watch out for
When looking for a small loan, prices can vary substantially. It is, therefore, crucial to compare your options before applying as it will have a dramatic effect on the total you’ll repay. Your credit file will also affect which loans are available to you. The best rates are reserved for those with good credit . If you have bad credit and try applying for these rates, it's highly likely you will be declined. This won't do your credit file any favours and will make it increasingly difficult to get accepted for the best rates in the future.
Criteria will vary from product to product, but as with any personal loan, you need to make sure that you're a UK resident, you are over 18, have a UK bank account, a valid Debit card and as with all loans, you’ll need to be able to convince the lender that you'll be able to afford repayments on a loan that you take out.
Due to the varying types of lenders that offer small loans, prices vary substantially across the market. It’s therefore, key to be savvy and compare your options first. If you have bad credit, it's best to look into bad credit loans, as applying for the best rates will only result in you being declined. As always before applying for finance, make sure you can afford the repayments - if you have any doubt then don't apply.