£1,000 loans
Compare £1,000 loans
- Search for a loan to cover short-term expenses
- See if you’re eligible for a loan in minutes
- Compare loans from a panel of trusted lenders
When can a £1,000 loan help?
If you don’t have much savings but need money in an emergency, a low interest £1,000 loan could help.
You might need it to:
- Replace appliances such as a leaking washing machine or faulty oven
- Mend a broken boiler
- Pay for home repairs
- Fix your car
A £1,000 loan is usually the minimum you can borrow from most lenders but you may find some high-street lenders and credit unions who offer smaller amounts.
How much will the repayments be if I borrow £1,000?
The size of your monthly repayment will depend on the interest rate, how long you borrow the money for, and your credit history.
The annual percentage rate (APR)
This is the yearly cost of a loan shown as a percentage of what you’ll owe. It includes interest and fees. The higher the APR, the higher your monthly payments.
The length of your loan
The longer the loan term, the smaller your monthly payments will be. However, be careful because smaller payments can be more expensive in the long run as you’ll take longer to repay the loan and pay more in interest over time.
Your credit history
Having a good credit score, which can be built up over time to show how you manage your debts, usually means you’ll have a greater chance of borrowing money at a lower rate of interest.
Use our loan calculator
An easy way to calculate the cost of loans is to use our loan calculator. Just enter the amount you want to borrow, the loan term, and the APR to help you figure out if a loan is right for you.
How much will a £1,000 loan cost?
The overall cost of your loan will - just like the size of the monthly repayments - depend on the APR, how long you spend repaying it, and your credit rating.
First, the cost of the interest for the entire loan is worked out and added to the amount you’re borrowing. This total is then divided into equal payments (usually paid once a month) according to the length of your loan.
The table below shows three examples of what you could expect to pay for a loan at different rates of interest, repaid over one year and two years.
| Loan term | Interest | Monthly payment | Interest paid | Total paid |
|---|---|---|---|---|
| 1 year | 7% | £86.43 | £37.13 | £1,037.13 |
| 2 years | 7% | £44.68 | £72.20 | £1,072.20 |
| 1 year | 20% | £91.86 | £102.28 | £1,102.28 |
| 2 years | 20% | £50.10 | £202.49 | £1,202.49 |
| 1 year | 35% | £97.68 | £172.14 | £1,172.14 |
| 2 years | 35% | £56.11 | £346.72 | £1,346.72 |
Be aware that smaller loans often have higher rates of interest. This is because lenders have fixed costs whether they lend you £1,000 or £50,000, and the bigger rate reflects their need to cover these against a smaller sum.
What should I consider before getting a loan?
Before you compare £1,000 loans, it’s important to work out how much you can afford to repay each month. Missing a payment or paying late can damage your credit score. If you get into serious difficulties and can’t repay your loan, you risk being taken to court. Whenever you need to borrow, be sure to check it’s affordable and that you‘ll be able to stay on top of the repayments.
What types of loans are there?
There are several different types of loan available:
Personal unsecured loans
A personal unsecured loan doesn’t need an asset, such as your home or car, to be used as security. While this is in your favour, it also means you’re considered to be a greater risk to the lender – so you’ll usually pay a higher interest rate than you would with a secured loan.
If you do fall behind on payments, however, you could end up being taken to court by your lender. In the most serious cases, this could result in debt collectors taking any valuable assets you own to pay off the outstanding loan and any additional costs.
Homeowner secured loans
Typically, secured loans are for larger amounts than £1,000 and usually offer lower interest rates than personal loans. Your home will be used as security to reassure the provider that you’ll pay back the loan. If you can’t repay, you could lose your property.
Guarantor loans
A guarantor loan may be an option if you have bad credit or no credit history. It’s an unsecured loan but is guaranteed by someone, usually a friend or family member, who agrees to pay back the loan if you can‘t.
At the moment guarantor loans aren’t available to compare through us.
Peer-to-peer loans
With a peer-to-peer loan, you borrow money from an individual or group of people, rather than a bank or building society.
Peer-to-peer websites connect you with people willing to lend to you, then act as intermediaries.
At the moment peer-to-peer loans aren’t available to compare through us.
Payday loans
Payday loans are designed to tide you over until you get paid. Also known as cash advances, they’re a type of short-term loan.
The cost of these short-term loans is now capped by Financial Conduct Authority (FCA) rules. This means you’ll pay a maximum of 0.8% in interest a day.
For example, if you borrow £100 for 30 days and repay on time, you’ll pay a maximum of £24 in interest. If you’re late repaying, the most you could be charged is £15.
And you can’t be charged more in fees than 100% of what you borrowed. However, for a £1,000 loan, that means you could have to pay back a maximum of £2,000.
Consider all your options very carefully before applying for a payday loan. If you need advice on getting your finances back on track, there’s lots of guidance at the Government-backed MoneyHelper website.
At the moment payday loans aren’t available to compare through us.
Instalment loans
Instalment loans are another type of short-term, high-interest loan which offers credit to those who may struggle to borrow from a mainstream provider.
Unlike payday loans, which usually need to be repaid by the end of the month, instalment loans spread the cost out over several months instead. This is typically from three to six months, but it can be stretched to a year or even more. However, like payday loans, it’s worth exploring all other options first before you think about making an application.
At the moment instalment loans aren’t available to compare through us.
Credit union loans
Credit unions also offer small loans, but you may need to meet their eligibility criteria to join. For example, you might have to live in the local area, belong to a particular trade union or work in a specific industry to become a member. There may also be a membership fee to join. This fee is usually a small amount, but it’s still worth keeping in mind.
Credit unions may have rules around how long you need to have saved with them before you can borrow money, so you might not be able to access a loan quickly.
At the moment credit union loans aren’t available to compare through us.
Can I get a £1,000 loan with a bad credit rating?
Although your options may be limited, it’s possible to get a loan with bad credit.
Lenders might restrict the amount you can borrow, the length of the loan, or both. But if you can keep up with repayments, you could improve your credit rating for future borrowing.
Use our loan eligibility checker to find out which loans you might be eligible for without any impact on your credit score.
What alternatives are there to £1,000 loans?
If you need emergency funds to buy goods, you could consider a 0% interest on purchases credit card instead. But be sure you can pay back what you spend in the interest-free period, otherwise you’ll be charged a higher rate of interest.
You could also consider a credit-building credit card if you have poor credit or a switch to a bank account that offers an interest-free overdraft.
Do I need a guarantor to get a £1,000 loan?
Not usually, but it might be the only option for some borrowers with bad credit.
If this is the case, you’ll need someone to guarantee that they’ll pay back the loan – often a parent or a close family friend – if you default on the repayments.
What’s a default? It’s when the lender closes your account because you’ve missed payments. You’ll receive a default notice first, asking you to catch up with what you owe. But if you ignore this or can’t pay anything back, you’ll be in default.
Do I need a credit check to get a £1,000 loan?
Yes. As with any kind of borrowing, lenders will want to run a hard credit check when you apply for a £1,000 loan. This will show up on your credit file and other lenders will be able to see it.
However, if you make the loan repayments on time and in full, it could help improve your credit rating.
When you compare loans with Compare the Market, we’ll conduct a soft credit check. This won’t be visible to lenders, so you can shop around to see what loans are likely to be available to you without it affecting your credit rating.
What can I use my £1,000 loan for?
Lenders do put some restrictions on what you can do with the money you borrow. For example, you typically can’t use it for:
- Gambling
- Investments, such as stocks and shares
- Purchasing property or as a bridging loan
- Business purposes
- Tax-avoidance schemes
- Illegal activities.
Some lenders also rule out using loans to cover household bills and late payments too, so check the loan terms and conditions.
How to find the right £1,000 loan
When it comes to choosing the right loan to suit you, make sure you consider the following:
- The length of the loan – most loan terms for £1,000 will be for between one and five years. A loan spread out over a longer period will mean smaller monthly repayments but could cost you more in the long run. If you can afford the monthly payments, a shorter term could save you money.
- Interest rates – when comparing loans, look for the lowest representative APR. This is the advertised rate that lenders must offer to at least 51% of borrowers. Just be aware that the rate you’ll be offered could be higher, especially if you have a poor credit history.
Use our loan eligibility checker to find out which loans you’re likely to be accepted for before you apply. It’s a soft credit check so won’t impact your credit score.
What our expert says...
“Personal loans generally have fixed interest rates, so your repayments are unlikely to go up. This can help you budget for your loan. But make sure you can afford your payments for the entire length of the loan.”
- The Editorial Team, Experts in personal finance, insurance and utilities
How can I compare loans quickly and easily?
Comparing £1,000 loans online from lots of lenders can take a while. Instead, use Compare the Market and we’ll show you which loans you could be eligible for, from a wide range of lenders.
Compare the Market acts as a credit broker, not a lender. To apply you must be a UK resident and aged 18 or over. Credit is subject to status and eligibility.
