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Compare £1,000 loans

Life throws its surprises at us. If your boiler’s not on the blink, then your car’s broken down. Financially, we can’t always prepare for when that happens, and we may need to take out a small loan get us through.

Fortunately, there are hundreds of lenders who offer £1,000 loans. But, how do you select a good deal from a rip off? That’s where we come in.

In This Guide:

How much do £1,000 loans cost?

In loan terms, £1,000 is a small amount to borrow. As such, interest rates tend to be higher than if you were borrowing larger sums, because the lender needs to make their money back.

How do I choose the best £1,000 loan?

First, decide on the loan term, which is how long you want to pay off your loan for. For most £1,000 loans, the term will be between one and five years, although you may find loans with longer terms than this when you run your loan comparison. In short, the longer your loan term, the more affordable your monthly repayments. However, you’ll end up paying back more overall in interest.

Next, compare interest rates. The lower the interest rate, shown as APR, the less you’ll pay back. However, it’s important to note that the advertised rate only needs to be offered to 51% of applicants. Therefore, if you don’t have the best credit score, it’s likely you won’t secure this rate of interest. We’ll talk more about credit scores and loans later.

When you compare loans with Money Expert, you can filter by interest rates to help you see what cheap loans are available. But we also recommend you keep an eye on the terms and conditions of each loan too, to be sure you qualify.

Will I qualify for a £1,000 loan?

Each lender will have their own set of qualifying criteria, but to take out a £1,000 loan you’ll normally need to be a UK resident aged 18 or over. You’ll need to have a bank account and be employed – lenders need to know you have a regular income in order to pay back the money. To give you a rough idea, you’d probably need to earn around £700 a month at least to take out a £1,000 loan. Students can usually apply for loans too, as can people who are in receipt of permanent benefits.

When you’ve chosen your lender and are ready to apply, you’ll need to give some information. You’ll be asked for your name and contact details (the usual stuff), but also your address history for the previous few years. Lenders will also ask for proof of income, which may mean providing a payslip or employment letter, as well as clarification of any other debts you have. Essentially, they’re checking to see you’ll be able to make repayments. This all happens at the application process.

Can I get a £1000 loan with a bad credit rating?

If you’ve got a bad credit rating, you can still get a £1,000 loan. However, the best loans are offered to those who have high credit scores, which means they’re the ones who get the low rates of interest advertised. If you have a poor credit rating, you’ll likely find you won’t be approved for the most competitive loans, so you’ll end up paying more. Carefully calculate what you can realistically afford to pay back to be sure you’re not taking on debt you can’t afford.

Alternatives to £1000 loans

There are other ways to borrow £1,000 if you don’t want to take out a loan. Overdrafts are one option, and it’s possible you’ll get a lower rate of interest. Plus, you won’t be bound to set repayments, although you will be charged interest for as long as you’re in debt.

Alternatively, you could get a credit card. Like overdrafts, you’re not bound to set repayments but – and this is very important – you will want to make minimum monthly payments to be sure you don’t get charged high levels of interest.

Finally, see whether friends or family can help you out. You can set up a repayment plan with them and your credit score won’t be affected.  

Where can I compare £1,000 loans?

Run a loan comparison with Money Expert to see what cheap £1,000 loans are available. We show deals from online lenders, banks and credit unions so you can be sure you’re getting the most competitive deal on the market. Choose your desired loan term, then simply pop in a few additional bits of information about your situation so we can find a loan best suited for you.