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Especially for borrowing of between £15,000 and £25,000 where rates are at their lowest, the Post Office is a strong contender in the personal loan market. It also offers borrowing terms of up to seven years.
Representative example
The representative APR example gives you an estimate of how much it might cost if you borrowed a certain amount of money. This helps you compare products and provides a guide on how much carrying a balance could cost. Your personal offer may vary from the representative APR example.
You could borrow £15,000 over 36 months with monthly repayments of £435.31.Total amount repayable will be £15,671.07. Representative 2.90% APR, annual interest rate (fixed) 2.90% p.a. Credit available subject to status.
Pros
- Competitive representative APRs (fixed), especially for larger loans
- Instant decision on online loan applications
- Funds paid into your current account within two working days
Cons
- Lower APRs may be offered by other providers
- APRs of up to 29.9% depending credit score and loan amount
- Longest borrowing terms limited to loans of £5,000 and above
Lowest representative APR
2.90% APR
Loans
£1,000 to £25,000
Term
12 months to seven years
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Key features
- Representative APR of 2.90% (fixed) on loans between £15,000 and £25,000
- Representative APR of 3.10% (fixed) on loans between £7,500 and £14,999
- Loan amounts ranging from £1,000 to £25,000
- Repayment terms of between 12 months and 7 years (restrictions apply)
- Charge of up to 58 days’ interest for full early repayment
Will I be eligible?
To apply for a Post Office personal loan, you must be over 21 and no older than 70 at the end of the borrowing term. You must be a UK resident (of at least three years), and have a UK-based bank or building society account that can pay direct debits.
You must also have a regular income above £12,000 per annum, and a good credit rating without a history of County Court Judgments or bankruptcy.
Before you take out a personal loan, consider the borrowing term and if anything might arise during that time that could affect your ability to meet the loan repayments. Missed or late repayments incur a charge and are likely to damage your credit score, making it more difficult to obtain credit in the future.
What more should I know?
There’s a £12 fee for missed/unpaid repayments with all Post Office loans and a standard charge of up to 58 days’ interest for paying off loan early in full.
You’ll typically receive an instant decision if you’re applying online. And if your application is successful, you could receive the funds as soon as the next working day.
You’ll then have a 14-day cooling off period starting from when you sign your agreement during which time you can change your mind.
Once the loan is up and running, you can apply to the Post Office to top up your borrowing, so long as you have paid off at least 50% of your loan balance or have made a minimum of 12 payments.
Compare personal loan deals from a range of providers across the market before applying, as personal loan rates can change frequently among providers.
As well as the rate, familiarise yourself with the loan’s terms and conditions such as potential fees for making early repayment in part or in full.
If you’re applying for a loan to consolidate existing debt, be sure that taking further borrowing is the best option. For example, compare the interest rates and borrowing terms between your current lender or lenders with that offered by the Post Office.
You can contact the Post Office call centre on 0800 169 2000 with any questions.
Is a Post Office loan right for me?
A Post Office loan is particularly worth considering if you need to borrow between £15,000 and £25,000, as you could be offered a competitive APR of 2.90% (fixed), over a borrowing term of 12 months to seven years.
However, bear in mind that this APR is representative. The one you are offered will depend on your credit score and personal circumstances, so it could well be higher. As is generally typical of loan providers, smaller-sized loans attract the highest APRs.
What are my alternatives?
If you’re planning to borrow just a small amount, a credit card offering 0% interest on purchases may be more suitable. This way, you will not have to pay any interest, providing you repay your balance in full during the promotional period.
Shop around for the best deals from a range of credit providers, before committing. An eligibility checker runs a ‘soft search’ on your credit report which means you can see how likely you are to be accepted for a deal without leaving behind evidence on your credit report.
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