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Direct Line Loan

The Direct Line loan rate is exceptionally low for smaller sums; and the redemption penalty is an admirably low one month's interest. Payment is strict though (no payment holiday and a minimum loan of £2000). Excellent value and easy to arrange.

Direct Line Loan examples (correct at publication date, uninsured):

  Monthly Repayment APR
£3000 across 2 years £133.92 6.9%
£5000 across 5 years £98.20 6.9%
£10000 across 7 years N/A N/A

Like the supermarkets, Direct Line keep rates low by keeping things simple. They don't want to see you (they'll do a quick credit check instead), and they want to get your business quickly.

Unlike some other lenders, the minimum amount you can borrow is £2000 (although if you want less than that, an overdraft arrangement is often cheaper anyway).

As with the supermarkets, there's no arrangement fee with a Direct Line loan- incidentally, if you decide to go to your bank and they ask for an arrangement fee, why not point this fact out? You can also choose what day each month you'd like to pay up (by direct debit). There is no payment break offered, and if you're planning a holiday, note that your Direct Line loan can then only be across a maximum 24 months. This is perfectly sensible and responsible lending- you shouldn't borrow heavily on a purchase which will be "used up" long before the loan is complete. Direct line will not sponsor business or investment lending.

Rates are around the magic 6.9% mark- but unlike its competitors, the Direct Line Loan rate seems to be across the board- this is definitely a top performer. Better still, the small print shows a redemption fee of a very reasonable one month's interest.