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Personal Loans
Low-interest loans

A low-interest loan is a type of loan that comes with an interest rate that is lower than the average or prevailing interest rates for similar types of loans. These loans are often sought after because they result in lower overall borrowing costs and more affordable monthly payments.

Companies that offer zero-interest loans tout these vehicles as no-lose opportunities for borrowers. A major purchase that might otherwise require a lump-sum payment can be spread out over 12 months to several years, with 0% interest, thereby creating a more palatable cash flow situation. But such loans present pitfalls, including the temptation to make impulse purchases, the tendency to overspend, and exposure to exorbitant penalties for violating a loan's terms.

Low-interest loans offers

LightStream provides an attractive option for personal loans, especially if you have a strong credit history. With competitive interest rates and a lack of fees, it's a borrower-friendly choice.

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Pros and cons

Pros

No charges or fees.
Enjoy an interest rate reduction when you sign up for automatic payments.
Home improvement loans offer extended repayment terms.
Benefit from the Rate Beat program and Experience Guarantee.

Cons

The website does not offer a pre-qualification option.
A few years of established credit history are required.
Debt consolidation loans do not facilitate direct payments to creditors.

SoFi's personal loans stand out as a top-tier lending option, boasting the qualities of a five-star lender. They offer a wide range of loan amounts, flexible repayment terms, and a host of special features that set them apart.

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Pros and cons

Pros

Joint Loan Option: Allows for joint loan applications, which can be beneficial for couples or co-borrowers.
Multiple Rate Discounts: Offers various discounts on interest rates, potentially reducing the overall cost of the loan.
Hardship Program: Provides a hardship program to assist borrowers facing financial difficulties.
Mobile App: Offers a mobile app for convenient loan management. Cons:

Cons

No Payment Date Choice: Lacks the option for borrowers to select their initial payment date.
High Minimum Loan Amount: Requires a relatively high minimum loan amount, which may not suit all borrowers' needs.

Upstart is an online lending platform that facilitates personal loans by connecting borrowers with banks and credit unions. While it offers fast approval and funding times, it comes with some limitations.

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Pros and cons

Pros

Accepts New Credit Borrowers: This financial service provider is willing to work with individuals who are new to the world of credit.
Fast Funding: Customers can expect a quick turnaround when it comes to funding, ensuring their financial needs are met promptly.
Payment Date Flexibility: Borrowers have the option to adjust their payment date, providing greater flexibility in managing their finances.
Pre-Qualification with Soft Credit Check: The service allows potential borrowers to pre-qualify using a soft credit check, which doesn't impact their credit score.
Seven-Day Customer Service: Customer service is available seven days a week, offering accessibility and support throughout the week.

Cons

Possible Origination Fee: Borrowers may be subject to an origination fee, which can add to the overall cost of the loan.
No Joint, Co-Signed, or Secured Loans: This financial service provider does not offer joint, co-signed, or secured loan options, limiting the borrowing possibilities for some individuals.
Lack of Mobile App: There is no mobile application available to manage loans, potentially making it less convenient for borrowers who prefer mobile access.

Discover stands out for several reasons. First, it offers unsecured personal loans, which means borrowers don't have to provide collateral like a car or savings account.

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Pros and cons

Pros

No Origination Fee: OneMain Financial does not charge an origination fee, making it easier for borrowers to access the full loan amount without deductions.
Pre-Qualification Option: Prospective borrowers can check their eligibility and estimated terms through a soft credit check, which doesn't impact their credit score. This allows applicants to assess their loan options without committing to a hard credit inquiry.
Fast Funding: OneMain Financial offers fast funding, providing borrowers with timely access to their approved loan funds.
Mobile App: The availability of a mobile app makes it convenient for borrowers to manage their loans and payments on the go.

Cons

Potential Late Fees: OneMain Financial may charge late fees for missed or delayed payments, which can increase the overall cost of the loan.
Limited Co-Sign and Joint Loan Options: Unlike some lenders, OneMain Financial does not offer co-sign or joint loan options, which may limit the borrowing options for some individuals.
No Rate Discounts: The lender does not provide interest rate discounts for features such as autopay or loyalty, which could have helped borrowers reduce their overall interest costs.

Universal Credit’s starting rates are high compared to other bad-credit lenders, so compare loan offers before you apply.

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Pros and cons

Pros

Direct payment to creditors with debt consolidation loans.
Fast funding.
Offers multiple rate discounts.
Free credit score access.

Cons

Origination fee.
Two repayment term options.

Santander offers various loans for personal needs, cars, home improvements, consolidating debts, and special occasions.

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Pros and cons

Pros

Diverse loan options
Flexible repayment terms
Competitive interest rates
Fixed monthly payments
Option for Early Loan Repayment
Concurrent loans
Same-day funding

Cons

Annual income requirements
Good credit required for low rates
Specific usage restrictions
Age requirement
Must not have a recent bankruptcy declaration, CCJ, or IVA within the past 6 years

Sainsbury's Bank, a subsidiary of the esteemed UK supermarket, offers a diverse range of financial services, including loans, credit cards, insurance, and savings accounts, with a focus on customer convenience and competitive solutions.

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Pros and cons

Pros

Diverse loan options
Flexible repayment terms
Competitive interest rates
Fixed monthly payments
Nectar Cardholder benefits
Same-day funding

Cons

Specific usage restrictions
High criteria for loan approval
Good credit required for low rates
No payment holidays are offered
Minimum annual income requirement is £7,500

Novuna offers a range of loans including car, home, debt consolidation, and leisure, all with flexible terms and competitive rates.

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Pros and cons

Pros

Diverse loan options
Flexible repayment terms
Payment holidays
Joint loan option
Fixed monthly payments
Option to pay extra to reduce interest
No charges for early repayments

Cons

High APR for smaller loans
No specific products for bad credit
Soft-search facility is unavailable
Good credit required for low rates
Funding on the same day is not an option

Tesco Bank offers diverse loans for your needs: small, large, and flexible long-term options to suit various financial goals.

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Pros and cons

Pros

Diverse loan options
Flexible repayment terms
Clubcard Holder benefits
Payment holidays
Joint loan option
Same-day funding
Competitive interest rates
Fixed monthly payments
Option to pay extra to reduce interest
No charges for early repayments
Soft-search facility

Cons

Restrictions for Non-Clubcard Holders
Good credit required for low rates

HSBC offers Personal, Premier, Car, Home Improvement, and Debt Consolidation loans with competitive rates and exclusive Premier benefits.

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Pros and cons

Pros

Diverse loan options
Flexible repayment terms
Competitive interest rates
Instant funding provided to HSBC customers
Premier account holder benefits

Cons

Instant credit decision and same-day funds for existing customers only
Good credit required for low rates

Zero-Interest Loan Basics

As its name suggests, a zero-interest loan is one where only the principal balance must be repaid, provided that the borrower honors the rigid deadline by which the entire balance must be satisfied. Failure to comply with the deadline carries hefty penalties. Most notably, the lender may rescind the 0% clause and apply backdated interest to the loan.

FAQ about Low-interest loans

Which loan has no interest rate?

Loans that have no interest rate are typically referred to as "interest-free loans." These loans are relatively rare, and when they do exist, they often come with specific conditions and are typically not offered by traditional financial institutions. Here are a few examples of interest-free loans:

Zero-Interest Credit Cards: Some credit card companies offer promotional periods during which no interest is charged on purchases or balance transfers. These promotional periods are usually limited in duration, and after the promotional period expires, regular interest rates apply.
Employee Loans: Some employers offer interest-free loans to their employees as a workplace benefit. These loans are often designed to help employees with immediate financial needs and are repaid through payroll deductions.
Government or Nonprofit Programs: In some cases, government agencies or nonprofit organizations may offer interest-free loans to individuals for specific purposes, such as education or home improvement. These programs are often targeted at low-income individuals or specific community development initiatives.

What's the lowest amount for a loan?

Minimum loan amounts are set by individual lenders, so the smallest loan you can get from some lenders may be more than you need. But there are lenders that offer small personal loans, including loans of $1,000 or less.