Compare £1,000 loans

Homeowner secured loans

These are generally for larger amounts than £1,000. They typically offer low interest rates but rely on using your home as security that you’ll pay back the loan. If you can’t repay, you could lose your home.

Instalment loans

These are repaid over a long period of time, which means that they sometimes offer lower interest rates. But because you repay your loan over a long period, you could end up paying more overall.

Guarantor loans

If you have a poor credit rating, you can ask a friend or family member (one with more assets and better credit) to co-sign your loan, which ultimately makes them responsible for the debt. This means if you don’t pay, they’ll have to. Because the loan has a guarantor, lenders may be prepared to offer a lower interest rate than without the guarantee because they’re more likely to get their money back.

Peer-to-peer loans

This is where you borrow money from individuals rather than a bank or building society. Loan rates vary according to what lenders think your risk of not paying back is. Some peer-to-peer loans offer low rates, but of course, this may not apply to your loan.

Payday loans

These are very expensive and often have short repayment periods. The penalty fees can add up quickly and you could end up in a lot of debt. Think extremely carefully before applying for one. If you need advice on getting your finances back on track, see the MoneyHelper website.

Credit union loans

Credit unions also offer small loans, but you may need to meet their eligibility criteria – for instance you may have to live in the local area, belong to a particular trade union or work in a specific industry. They can also have rules around how long you need to have saved with them before you can borrow money, so you may not be able to access a loan quickly.

Before you compare £1,000 loans, it’s important to work out how much you can afford to pay back each month. Missing repayments and even paying late can damage your credit score, and if you can’t repay your loan you risk being taken to court.

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 usually charge a higher interest rate for borrowers with bad or limited credit. You may also find that lenders have more restrictions on the amount you can borrow and the length of the loan, compared with borrowers with a good credit history.

But as long as you can keep up with the repayments on the loan, you could improve your credit rating for future borrowing.

Alternatives to taking out a bad credit loan for £1,000 could be a credit building credit card or switching to a bank account that offers an interest free overdraft.

Do I need a credit check to get a £1,000 loan?

Yes, as with any kind of borrowing, lenders will want to perform 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 repayments on time and in full, it could help improve your credit rating.

When you compare loans through Compare the Market, we’ll conduct a soft credit check. This won’t be visible to lenders, so you can shop around and see what loans are likely to be available to you without it affecting your credit rating.

How to find the right £1,000 loan

When it comes to choosing the right loan for you, you’ll want to consider the following:

• The length of the loan - most loan terms for £1,000 will be 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 should save you money.
• Interest rates - when comparing loans, you’ll want to 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.
• Lender requirements - all lenders have a list of criteria that borrowers have to meet, so check what these are before applying for a loan in case you’re not eligible. A soft search quote option lets you check whether you have a good chance of being accepted before you actually apply.