Should you take a personal loan or use a credit card?

For one-off borrowing above £3,000, a personal loan is almost always cheaper than carrying a balance on a credit card — even a 0% promo card. The lowest-rate UK loans sit around 6.2–6.9% APR fixed; a credit card at 0% expires and reverts to around 22.9% on any leftover balance. Loans also force a discipline by setting fixed monthly payments and an end date.

For smaller amounts you intend to clear within 18 to 24 months, a 0% purchase credit card can be the better tool — provided you can guarantee you will clear the balance before the promo period ends. If there is any chance you can't, default to a personal loan.

For debt consolidation, do the maths first. Combining three £2,000 balances at 24.9% APR into a single £6,000 loan at 6.9% over five years saves significant interest — but only if you cancel or freeze the old credit lines. Lenders that re-fill once consolidated turn an interest saving into an interest disaster within twelve months.

Frequently asked questions

What's the difference between APR and interest rate?
The interest rate is just the cost of borrowing. APR adds every compulsory fee charged by the lender, expressed as an annual percentage. APR is always equal to or higher than the interest rate — compare loans on APR, not the headline interest rate.
How fast can I get a personal loan in the UK?
Most major UK lenders pay funds into your account within 24 hours of accepting the loan agreement. Some — including Cobalt and Mercury on this page — fund within 2 hours during weekdays. A bank-of-record customer can sometimes get same-day funding.
Can I pay off a UK personal loan early?
Yes. The Consumer Credit Act gives you the right to settle a loan early at any point. The lender may charge up to 1 month's interest on the outstanding amount as an early settlement fee, but several lenders waive this entirely — check each product page above.
Will a loan application affect my credit score?
A soft search — what you get when you use the eligibility checker — does not affect your score and is invisible to other lenders. Only the full application is a hard search, which causes a 5–10 point dip that recovers within 3 months if you make payments on time.
What if I miss a loan payment?
Contact the lender before the missed payment hits — UK lenders are required to consider hardship arrangements like reduced payments or a holiday before reporting arrears. A single missed payment marks your credit file for six years; arranging a plan in advance often avoids that mark.