5000 Loan
£5,000 Loan
There is a wide range of funding options available to you if you're looking to take out a £5,000 loan.
Sorting through different loans and trying to figure out what's right for you can often be overwhelming. Most customers who take out a £5,000 loan tend to take out a personal loan.
Applying for a loan is a straightforward process and will vary depending on the lender selected. There are many well know brands that offer unsecured personal loans however what you will be offered will depend on your circumstances and credit status.
How much does a £5,000 loan cost
This will depend on your circumstances, but assuming you have an excellent credit score then you should qualify for a top of the market personal loan rate.
5000 loan Example
Borrow: £5,000
5 year term
Interest rate: 3.8%
Monthly repayments: £91.63
Total cost of credit: £497.92
Total loan repayment: £5,497.92
Calculations are based on the interest rate being fixed over the term and no repayments are missed.
Please note that many lenders typically will apply their best loan rates for loans between £7,500 and £25,000 and for lower loan amounts you will pay a higher rate of interest. If you opt for a loan term less than 5 years the interest rate may also be higher.
Personal Loans
A personal loan tends to be more straightforward than other forms of finance. As the loan is unsecured, it does not require you to put an asset (such as your home) down as collateral against the loan.
Personal loans are offered by the majority of banks and other lenders, and you can typically expect to borrow between £1,000 and £25,000 over a relatively short period of time (in comparison to a secured loan).
Personal loans can be taken out for a variety of different reasons, and lenders tend to specialise packages depending on whether you wish to use the loan for home improvements, car purchases, debt consolidation etc.
The loan term will carry depending on the lender. Some unsecured lenders only offer personal loan terms from 1 to 5 years.
Use our loan calculator to help find an online loan. Most lenders will offer a fixed rate for the period of the loan term so your monthly payments will not change.
Homeowner Loan
A secured loan or homeowner loan (also known as a second charge loan) is a loan that you take out with a particular asset of yours (usually your home) put up as security.
As a result, legally speaking, the creditor from whom you are borrowing the money will retain legal ownership of the asset in question, until you repay the loan.
Secured loans can be used for almost all legal purposes.
As secured loans tend to have larger borrowing amounts and longer repayment terms, secured loans are commonly used to carry out home improvements, home extensions and debt consolidation.
There are other types of borrowing than personal and home owner loans such as authorised overdrafts and credit cards you might also wish to consider.
A homeowner loan application will take into account your credit history so the loan you will be accepted for may depend on this. If you are taking out a loan in joint names then your partner's credit rating will come into play.
Considerations before taking out a loan
Generally speaking, there is no right or wrong loan option to choose from when looking to take out a £5,000 loan. However, depending on your personal circumstances some options are likely to be more suitable for your needs than others.
Before committing to a loan we strongly recommend that you contact a loan broker who can evaluate your situation and provide you with unbiased, expert advice to make the right decision for you.