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Last updated: 16/10/2020 | Estimated Reading Time: 5 minutes

Compare £5,000 Loans

In need of £5,000? Credit card limits aren’t always high enough and interest rates can be steep. Therefore, a loan could be the most affordable way to borrow.

Read on to find out how to get the best loans for £5,000.

In This Guide:

What types of £5,000 loans are there?

You can take out £5,000 loans for all manner of things: car purchases, home improvements, to help with bills. Or maybe you need it for something fun, like a family holiday or a celebration. And sometimes, unexpected costs just crop up and we need a quick cash injection.

You can also take out a loan to consolidate other debts. If you have multiple debts, it can be tricky to keep track of them. Instead, you could merge your debts into one total £5,000 loan. Many people do this, but just remember to keep an eye on interest rates, as streamlining the process could come with a higher cost.

How do I choose the best £5,000 loan?

When choosing a loan, first think about how long you want to be paying it off for. This is called the loan term. The longer the loan term, the more interest you’ll pay back overall but your monthly repayments will be more affordable.

Most lenders offer £5,000 loans with terms of one to seven years, though there are always exceptions to be found. You could find a £5,000 loan repayable over a matter of months or, alternatively, a decade or longer. It really depends, so decide what’s right for you.

Now you’re ready to compare loans, keep an eye on interest rates. For a more transparent figure of what your loan will cost, look at the total repayable sum to see if you’re getting a good deal, and always read the terms and conditions to avoid any nasty surprises.

What are the risks of a £5000 loan?

Borrowing money in any form has its risks, and a £5,000 loan is no different. Crucially, you must find a deal that’s affordable for your budget. Of course, we all want to pay as little interest as possible overall, and you may be tempted to opt for a shorter loan term with higher monthly repayments. However, if can’t keep on top of your repayments, you risk falling into debt, paying further penalty fees and harming your credit score. It is therefore vital to look at your finances and plan what you can realistically afford to pay back each month.

Consider your credit score before you apply, too. Any loan application will show up on your credit report, so if your application is declined then this’ll have a negative impact on your credit rating. Read the terms and conditions before you apply to know your likelihood of being accepted.

Will I qualify for a £5k loan?

Every lender will have their own criteria on which they base your loan application, but there are a few things that are fairly standard across the board.

Usually, you’ll need to be a UK resident, be over 18 and have a regular income. What that income is will depend on the lender, but you’ll probably be asked to provide proof. If your income is too low, then you might not get accepted. So, to reiterate, check the terms and conditions!

Can I get a £5,000 loan with a bad credit rating?

Cheap loans are harder to come by when your credit score isn’t great, but you still have options. When you see a loan with a low APR, these tantalisingly small rates of interest only need to be offered to 51% of applicants. That’s right – half the time applicants don’t get those rates. And if your credit rating isn’t the best, you’ll probably miss out.  

As we stressed, it’s important you know your likelihood of being accepted for a loan before you apply. Just because your score is bad it doesn’t mean you’ll be declined, but you should know your expectations.

When you run a loan comparison with us, we just ask for some basic information to give you an idea of what loans you’re likely to be accepted for. But don’t worry, this won’t affect your credit score.

Can I increase my £5,000 loan?

Perhaps you’ve borrowed £5,000, but it’s not quite enough. Some lenders will allow you increase your loan, sort of like topping it up. They may adjust the whole loan accordingly, or you’ll take out an additional loan on top. For this reason, how much interest you’re paying and whether you’re getting a good deal isn’t always clear, so it’s best to get clarification on the exact cost from your lender. In addition, most lenders will put a cap on how much you can top up.

Where can I compare £5,000 loans?

Use our loan comparison tool to find a £5,000 loan suited to you. We don’t just show deals from online lenders, but credit unions and banks too. Pop in your desired loan term, search by interest rates and we’ll do the rest.