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Personal loan rates are at record lows spelling good news for borrowers who want to access funds for a car, home improvements or to clear debts and pay the money off steadily over time.

But loans can be notoriously difficult to navigate and a bit of a minefield if you are not equipped with the right information or are not the kind of borrower who will get the best advertised rate.

We highlight the best personal loans around below, complete with an explanation why, and explain how to go about getting the best deal for you.

New car? Many people take out a loan to cover the initial cost

When making our pick of the loans around we don’t just take the best rates from the comparison tables – we also scour the market for all-around winners.

However, you can also investigate the best loan for you personally using our deal finder, linked below. This is a highly-recommended course of action.

Powered by our partner Moneysupermarket it offers a smart loan search - helping you to compare all the top deals that match your needs.

First things first...

Are you trying to cut existing credit card debt?

If so, a loan probably won't be the absolute cheapest option for you - as long as you do not have a large amount of debt and can try to clear it relatively quickly.

The whole point of balance transfer deals on credit cards are to shift card debts to them at a special cheap rate.

These rates will almost certainly be cheaper than loans for less than £1,000.

And for larger amounts they can still prove more cost effective. 

Providing you can transfer to a credit card, and will definitely pay it off before the 0 per cent deal ends, a balance transfer can prove the cheapest option.

If you can't, you would need to make sure you transfer your balance to another 0 per cent deal, or you will face high interest charges.

If you don't have the financial firepower or discipline to clear the debt within a 0 per cent balance transfer period then a loan may be the best move. It sets monthly payments and as long as you keep up with them over the course of the loan, you will end up with that debt cleared. 

> Use our guide to find the best 0 per cent transfer credit card for you.

Best buy loan rates at different levels

Remember: Terms and conditions apply on all these loans, particularly on how long you borrow for, and rates you are offered will vary depending on your credit history

Loans up to £5,000  

Peer-to-peer provider Ratesetter offers the cheapest deal at 4.4 per cent. 

Zopa charges a slightly higher 5.3 per cent on the same amount.

Lending Works charges 5.9 per cent - the cheapest deal available for someone borrowing between £3,000 and £5,000.

Loans for £5,000 to £7,499 

TSB offer the best-buy rate of 3.3 per cent for someone borrowing £5,000 to £7,499.   

Hitachi Personal Finance charges slightly more at 3.4 per cent.  

M&S Bank and peer-to-peer lender, Zopa, both charge a rate of 3.6 per cent. M&S offers up to seven years to repay at the rate, and Zopa gives you up to five years. 

Sainsbury's Bank offers a rate of 3.7  per cent over three years to anyone with a Nectar loyalty card.

If you need longer to repay or don't hold a loyalty card you will be offered a rate of 3.8 per cent.   

Ratesetter and Ikano Bank both also apply interest at 3.7 per cent on amounts between £5,000 and £7,500.  

Loans for £7,500 to £15,000

Lenders typically offer the best rates to those borrowing between £7,500 and £15,000 as this is the bracket most banks typically advertise.  

TSB charges 2.8 per cent interest on loans of between £7,500 and £20,000 lasting up to five years.

M&S Bank offers the same low rate on up to £15,000, but it gives a longer repayment window than both TSB and Sainsbury's Bank without loading the rate at up to seven years.

Sainsbury's Bank charges just 2.9 per cent but only to Nectar card holders borrowing over one to three years. The rate jumps on terms between four and five years or for anyone without a supermarket loyalty card to 3 per cent.

However borrowers can use the loan to borrow up to £19,999 at the same low rate.  

Zopa  and Tesco Bank charge 3 per cent on mid-sized amounts repaying over up a a five-year term. Hitachi Personal Finance offers a slightly higher rate at 3.1 per cent.

Cahoot offers a rate of 3.3 per cent, but  on a slightly more generous bracket of up to £20,000.     

top personal loans

2.9% for £7.5-£20k (Nectar card deal)

Over 3 years

2.8% for £7.5-£20k

Top rate available, repay over 5 years

4.4% for £3-5K

Best deal for small amounts

2.8% for £7.5k-£15k

Top rate, repay over 7 years

6.7% for £30-50k

Largest personal loan available,

> Now find and apply for the best loan for you

The rate you secure depends on your personal circumstances

Use your loyalty to get a better rate

Savvy borrowers with a Nationwide current account or those with a Sainsbury’s Nectar loyalty card can take advantage of existing customer deals and price guarantees to bag themselves even lower interest.

Remember, taking advantage of either the Nationwide or Sainsbury’s Bank price promise will require applying for multiple loans at the same time, which can leave a mark on your credit file and make it harder to be accepted in the future. 

Do you have a Nationwide current account? 

 Nationwide Building Society guaranteed to its current account customers that it would undercut any personal loan offered to them by 0.5 percentage points.

The lender also already offers a low rate of 3.4 per cent for those wanting £7,500 to £14,999.

This mean borrowers who bank with Nationwide could bag themselves a rate of under 3 per cent in theory, using Ikano Bank's 3.2 per cent deal.

Do you have a Sainsbury's loyalty card? 

Exclusive deal: cut your interest rate by taking out a free Nectar Card

Those with a free Sainsbury’s Nectar card can apply for a rate of 2.9 per cent on amounts between £7,500 and £20,000 when repaying over one to three years.

This loyalty-rate is 0.1 per cent lower than it offers to new customers.

Loans lasting over four or five years come with a higher interest rate of 3 per cent.

Although the process may seem a little long-winded for a reduction of 0.1 per cent, it could be worth signing up to the free loyalty scheme before you apply for a Sainsbury's loan as savings will add up over time. 

Nectar card holders must simply swipe it in store or use it online within six months of applying for the loan, to qualify for the deal.

Don't forget the Price Promise

As an added bonus, Sainsbury's Bank has included a price promise which states if you can get a better deal elsewhere, it will beat it by 0.1 per cent.

To qualify, successful applicants must provide a written offer from the other lender in the same name as the loan offered by Sainsbury's within 28 days of the Sainsbury's Standard Loan being approved.

You must not have accepted the standard loan offer by signing and returning the Sainsbury's Loan agreement.

The loans must be compared on a like-for-like basis, based on features such as, but not limited to, length of loan, fixed loan amount and repayment structure (including interest and set up fees - if any). 

However, bear in mind that multiple credit searches impact your credit footprint - if you do sign up to this deal you will have effective applied for two loans. 

• Find out more about how to protect your credit rating

The offer may be higher depending on your personal circumstances, credit assessment procedures and other related factors.   

Best for loans of more than £15,000

If you need to take out a loan for more than £15,000 there are several options. 

This is Money has written a separate guide to your options if you need to take out a large loan which you can read here 

Several banks have now started extend the typical £7,500 - £15,000 loan bracket to £20,000 or £25,000, meaning the same market-beating rates on slightly larger amounts. 

As listed above  TSB, Sainsbury's Bank and Santander-owned, Cahoot all offer their best rates up to £20,000.    

Clydesdale and Yorkshire Banks both offer the a rate of 3.9 per cent up to £25,000. 

First Direct 1st Account customers can grab a 3.3 per cent rate but on up to £30,000 over a repayment term of up to seven years.  

Anyone with a Tesco Clubcard can take out a loan of up to £25,000 for 3 per cent repaying over a term lasting up to seven years. You can get the same loan for 5 per cent over eight, nine or ten year terms.  

Borrow up to £50,000.  

 HSBC-owned bank, First Direct, charges a headline rate of 6.7 per cent on amounts between £30,000 and £50,000 with repayment terms of between 12 and 84 months. The loan is only available to customers with a First Account.

Sainsbury's Bank offers up to £40,000 with a rate of 6.8 per cent for someone needing five years to repay.

Loans repaid over up to five years and 8.8 per cent over a maximum of seven years.

Tesco Bank offers Clubcard customers borrowing up to a maximum £35,000, repaying over a maximum term of eight years at a rate of 6.7 per cent.