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How do I know if I’m getting the best loan rates?

Written byKoyo Loans
First published23rd June 2022
  • Decide what you need from a loan
  • Understand the importance of APR
  • Shop around
  • Use a comparison site
  • Improve your credit score

With so many financial institutions and third parties willing to provide you with a loan, knowing if you’re being offered the best rate can be challenging. After all, loans can be tricky to understand if you don’t know what you’re looking for. To help out, we’ve put together some of our top tips on how to make sure you’re getting the best loan rates.

Decide what you need from a loan

Everyone who applies for a loan comes from different circumstances. People may need loans for a variety of reasons, including car payments, home improvements and debt consolidation. Your first job when applying is to decide whether you actually need a loan and how much you need to borrow. 

Just because you can borrow £10,000, doesn’t mean that you should. You can begin with our helpful loan calculator that shows you precisely how much you can borrow and how long you have to pay it back. This is a great starting point and will give you a good idea of what to expect. 

Understand the importance of APR

While there are lots of things to consider when borrowing money, fully understanding APR is crucial. APR stands for annual percentage rate and stipulates how much you will pay back in one year, inclusive of interest and fees. 

In other words, APR puts hidden fees in plain sight and makes it easier to understand what you’re required to pay back each year. You can then compare the APR of one company to another, highlighting which is offering you the best rates on a loan.

Shop around

There are lots of financial institutions in the UK that are willing to provide you with a loan. From your bank to the Post Office, you will find different rates and deals when you shop around. We would advise you to consider as many loan providers as possible, checking out the terms and conditions of each offer, as well as the APR, before making your decision. You can use a comparison site to help you, as we explain below.

Use a comparison site

Jumping from site to site to compare loans can be frustrating. That’s where loan comparison sites like Compare the Market come in handy. You can set the terms that you’re looking for and see clearly what each loan provider can offer. Once you have a good idea of the loan rates available, you can then reach out directly and submit an application to the provider of your choice. 

Improve your credit score

People with better credit scores will receive better offers when it comes to personal loan applications. While you can’t improve your credit score overnight, ensuring you pay your bills and monthly debt repayments on time is an easy way of boosting your score. You should also check the credit agencies’ files on you are up to date and free from errors. We covered how credit scores influence personal loan applications in this recent blog post

If you’re looking for an unsecured personal loan of between £1,500 and £12,000, then Koyo Loans could help you. 24.9% APR Representative. Find out more about our personal loans to decide if they match your needs, and get in touch with one of our friendly team members if you have any further questions before submitting an application. 

Koyo Loans is the trading name of BETR Technology Ltd. Company No. 11483187. Registered Office: Huckletree Soho, Ingestre Court, Ingestre Place, London, W1f 0JL

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