Big-name firms "cherry pick" the best customers
All kinds of firms offer direct loans, and interest rates can be very low – if you meet the criteria. The best direct loans are for safe bets who want to borrow large sums of cash, and you might find that the typical APR might not apply to you.
Direct loans are one of the cheapest types of loan: because you apply online the lender doesn't incur lots of costs, and the resultant savings mean lower interest rates. However, don't assume the quoted APR is what you'll be offered: most direct loans have different interest rates for different customers and loan amounts.
If you need to borrow £1,000, direct loans are almost certainly a bad idea: interest rates will be very high, and only start falling when the loan amount exceeds £3,000. APRs are even lower if you borrow £5,000, and lower still if you borrow £20,000.
Borrowing a higher amount doesn't necessarily mean your direct loans will come with the advertised APR, though: the rate varies from customer to customer, and if the lender thinks you're a high risk then it will charge a higher APR than it might offer its other customers. Don't assume that the advertised APR is the rate you'll actually get – and if the rate you're offered is significantly higher than advertised, shop around to see if you can get a better deal elsewhere.
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