Who Offers the Cheapest £1000 Loan for 12 Months?

Q: Who offers the cheapest £1000 loan for 12 months? ~ Kris, Luton.

From our collected data, the cheapest £1000 loan taken over a year is available from HSBC’s First Direct. They charge just £39.93 (7.5% APR). To qualify for this you will need to be banking with them on their 1st Account. If you switch to them they currently offer £100. In essence, with this bonus in place you would be receiving a free loan. On investigating this account further they charge a monthly fee of £10, but this can see a waiver when paying in £1000 each month after 6 months. An added perk is their interest free £250 overdraft and their support team operates 24/7. Once joined up they initiate immediate funding.

If you are happy with your bank then the next best cheapest option would be Zopa at £41.96 (7.9%). Once a decision is provided within 48 hours you’ll receive instant funding. You can opt with Fast-Track for a same day decision and payout (during the working week), but this costs £57.50 extra. There is a minimum age requirement of 20 for this P2P product. If age is an issue there, then Sainsbury’s is a good shout. They ask for £64.76 (12.4%) for Nectar card holders. Otherwise, the charge is a little higher at £65.24 (12.5%). There is a delay with documents needing to be posted.

Sainsbury’s actually offers the cheapest personal loans on the market, but this is when you borrow sizeable sums. The lowest priced £1000 loan for bad credit would come from UK Credit. This is a guarantor solution with a homeowner backing at £193.88 (39.9%). There is a higher rate for tenant backings at £257.60 (54.9%). There are a few other cheap guarantor options, but if you don’t wish to involve a third party then the lender to opt for would be Likely Loans. They ask for £228.32 (47.9%) and release the funds on the next working day. Most subprime lenders charge closer to the full sum (1k) that shows how competitive they are.