Loans with a personal touch: the new way to borrow | will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by will always be from Be Scamsmart.

ARCHIVED ARTICLE This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Published: 17/08/2017
man looking at laptop and holding phone

Applying for a personal loan can be a minefield. Not only do you need to make sure your credit score is as good as it can be, but you need to prepare yourself for the fact that you may not get the advertised rate – and that you may even be declined.

Unfortunately, the latter will have a definite impact on your credit score, which will start a domino effect and make it even harder to be approved for credit in the future. What if there was a less potentially damaging way of arranging things? Well, thanks to some new developments, there could be.

Soft searching

There are a growing number of providers offering the chance to provisionally apply for a loan without it impacting your credit score. This kind of "soft searching" can be ideal for those who aren't sure if they'll be accepted, as if they aren't, there won't be a black mark left on their credit report – and if they're approved, everyone wins!

One of the latest providers to offer this kind of loan is Asda Money, who's gone one step further to offer loans that are "tailored to individual financial situations". Having partnered with Freedom Finance, it uses soft search technology and reviews a variety of lenders so the customer is more likely to be accepted – rather than heading to a single high street lender, where there's a greater chance of being declined – and can offer a rate more suited to the applicant's individual circumstances.

"Our strong belief and analysis of the current market was that a new and different approach to personal loans was desperately needed to better fit the needs of our customers and consumers who are constantly turned down or offered a rate that doesn't suit them," said Katie Walley, head of Asda Money, and it looks as though it could be a method that will catch on.

Personalised borrowing

The idea of personalised borrowing is something that a lot of customers could gravitate towards, particularly those who are worried about being accepted. This method means there's no need to worry about damaging credit scores, and as several lenders are approached at the same time, it increases the overall acceptance rate, too.

"Borrowers looking for a competitive loan rate but afraid of damaging their credit score with multiple applications will be delighted by this new loan from Asda Money which offers soft search technology and a more personal approach," commented Rachel Springall, finance expert at Moneyfacts. "Starting with a rate of 2.8% places them on par with the lowest rates currently available on the market, so it's a great starting position for its launch."

Check out the current Best Buys to see how it compares:

Unsecured - £7.5k Over 5 Years

Provider APR Monthly Repayment Total Amount Payable Redemption Penalty
M&S Bank 2.80% £133.98 £8,038.80 Yes
TSB 2.80% £134.13 £8,047.80 Yes
Sainsbury's Bank 3.00% £134.63 £8,077.80 Yes
Admiral 3.10 £134.95 £8,097.00 Yes
Hitachi Personal Finance 3.10% £134.97 £8,098.20 Yes
AA 3.30% £135.60 £8,136.00 No


Unsecured - £10k Over 5 Years

Provider APR Monthly Repayment Total Amount Payable Redemption Penalty
M&S Bank 2.80% £178.64 £10,718.40 Yes
TSB 2.80% £178.85 £10,731.00 Yes
Tesco Bank 3.00% £179.50 £10,770.00 Yes
Sainsbury's Bank 3.00% £179.51 £10,770.60 Yes
Admiral 3.10 £179.94 £10,796.40 Yes
Hitachi Personal Finance 3.10% £179.96 £10,797.60 Yes

Source:, 16.08.2017

Intense competition

It's certainly a great time to consider applying for a personal loan, with the market in general being at the top of its game: "The personal loans market is rife with competition and the challenger banks and supermarket bank brands tend to offer the lowest rates, starting at 2.8% from TSB and M&S Bank, and now Asda Money," said Rachel.

"Even if customers don't get approved for the lowest possible rate, they are still going to see a reduction in interest compared to years gone by. In the last five years alone the average rate on a loan of £10,000 has fallen from 8.1% to just 4.6%."

That's a huge reduction, and could mean your repayments are far lower compared with years gone by. So why not see the kind of options available? Our personal loan calculator can give you an idea of the best loan rates according to your individual needs, and from there you can head to the provider for a more personalised overview – and if you head to one of the providers offering a soft search, you needn't worry about damaging your credit score, either.

What next?

If you're worried about your credit score, start by finding out what it actually is by heading to a credit check provider.


Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

man looking at laptop and holding phone

Cookies will, like most other websites, place cookies onto your device. This includes tracking cookies.

I accept. Read our Cookie Policy