Low interest rate loans

If you need to borrow money to help pay the bills, always use a low interest loan. They can be obtained from credit unions, your local council, and some charities near you as listed below. However any loan, even one with a low interest rate, should be a last resort. You should always look into all other schemes and assistance programmes first, including welfare grants, friends or family, local charities, and any other source of funds.

The interest rate on any loan will always vary. Low interest rates will tend to be in the low single digits, such as 2 to 8 per cent. The rates will be much lower than credit cards or payday lenders. But the exact rate will vary based on the applicant credit, income, risk, and other criteria.

Bills to pay with low APR loans

All types of bills, including rent, holiday, or fuel bills and others can be paid. However the cash should not be used to pay a critical living expense, such as rent, fuel bills, or food, unless the borrower has the ability to pay back the loan before a cycle of debt starts.

If the low interest loan is being used to improve an asset, such as improving a home, that is always a great option. Or the money can be used to consolidate debt (pay off a high APR loan with the lower APR one), buy a car, or some other major purchase. Or maybe to add emergency efficiency measures to a home or flat. All of these are decent reasons to borrow money.

How to get low interest loans

There are 3 main places to borrow money at. Each of them have restrictions in place and a formal application process. Applicants should bring proof of income, identification, copies of bills and other debts owed and more. The more information the better.

Rents in the UK are going up faster than wages for most people. Tenants and those on a local housing allowance often need assistance to pay the rent. A loan should be lower down the list, but using one with a low interest rate may be better than going homeless. There are options out there, including loans that help pay rent in an emergency.

One will be a local council near you. Many have bond as well as low interest loan schemes. The money can pay for a number of bills, including rent, mortgages, deposits, car repairs, and more.  Not only can a loan be provided to the family, but the council can link the applicant with everything else needed including Trussell Trust food banks, Citizens Advice, and other resources. Councils have created this low interest scheme as an alternative to high cost payday lenders. More on council loans.

Five Lamps is a charity with multiple locations. They tend to help people that other banks or lenders will not give money too. There is help for homeowners to make their home more efficient and save money on heating bills. Loans can be issued for paying emergency bills or even starting a business. Find how to apply for low interest loans from Five Lamps.

Universal Credit recipients can get money from low interest or zero APR rate budgeting advances. The funds will be issued in the form of an emergency loan. The aim is to provide the universal Credit household a little extra money while they are waiting on their other funds. The money can help them with bills, rent, buy food, clothes, or any other expense they have. More on zero interest Universal Credit budgeting loans.

Not-for profit credit unions can also provide funds. They only assist members of the credit union. Which is often free to sign up for. They not only can provide low APR loans to qualified borrowers, but credit unions also have savings accounts, debit cards, payroll options, and more. Budgeting and debt reduction workshops are also often offered. Find a list of credit unions near you for loans.

Low interest loans can also be provided from welfare schemes or a crisis scheme – councils often have information on them. Or citizens advice is often a good place to be liked to a low APR rate loan. Find help from crisis loan scheme from council.