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Lower my personal loan bills guide

This guide to lowering loan bills explains how you can lower your loan interest and lower your loan payments.

Paying too much for a personal loan? Here are ways to get lower loan payments:

Reduce loan interest - switch to lower my loan bills

Existing loan? Many people think it's not worth switching a loan, or that the sums you might save are small.

But say you owe £10,000 with four years to go.

Switching from a 12.5% loan to an 8% one would save you more than £1,000 in interest, and cut your monthly repayment from £266 to £244 – more than £20 a month.

With £10,000 left to pay over 4 years	Original loan	New loan
Interest rate	12.5%	8%
Monthly payments	£266	£244
Interest paid	£2,768	£1,712

Saving by switching: £20+ a month, £1,000+ in total

Early repayment charges

There can be a small cost to switching a loan. You may be charged up to two months' interest for loans up to 10 years. But many lenders charge less – and some charge nothing.

A one-month interest charge is likely to be well under £100 if you owe less than £10,000 still - phone your lender to check the cost.

(Different rules apply if your original loan was longer than 10 years, or for a large amount – check with your lender).

Lower my loan payments - borrow for the best length of time for you

There are two ways to look at what you pay:

How much you pay each month
How much you pay in total

Imagine you borrowed £10,000 at an 8% interest rate:

Two ways to lower bills	Over 5 years: cheaper loan overall	Over 10 years: cheaper monthly bills
Monthly cost	£203	£121
Total interest	£2,180	£4,520

With a 5-year loan, your monthly payment is higher – just over £200, as opposed to £121.

However, you borrow for less time, so the total amount of interest you pay is less – just £2,180, instead of £4,520.

So you can lower your bills in two ways:

Go for a longer term to pay less each month (but be aware you'll pay more in total).
Or go for a shorter term for a lower overall bill(but make sure you can afford the higher monthly repayments).

Lower my loan payments - get low bills for payment protection insurance

You may want payment protection insurance (PPI) on top of your loan.

It covers you if you're ill or unemployed and can't meet the repayments because you're not working.

It can be useful, especially if any employer's benefits wouldn't be enough. But check the policies carefully to make sure you're covered, as there are usually exclusions.

You may be able to get the same cover elsewhere for less – so if you do want PPI, shop around for that, as well doing a loan comparison.

Lower my personal loan bills brought to you by LowerMyBills from Experian

The LowerMyBills guide to loan bills was created by LowerMyBills to help you lower your personal loan bills by switching, length of payment time, and payment protection insurance, giving you the information you need to help you reduce loan interest and lower loan payments.