Compare £5,000 loans
A £5,000 loan can help ease cashflow problems. We can help you find a £5,000 loan, even if you’ve previously had bad credit.
Is a £5,000 loan right for me?
A £5,000 cash injection could be just what you need to cover one-off costs like paying for a wedding, buying a new car or a home improvement project. Borrowing £5,000 upfront, then paying back in monthly instalments, can be a good way to spread the cost.
But whatever your reasons for taking out a loan, it’s essential that borrowing is always carefully budgeted for and that you have a solid repayment plan in place.
If you’re sure you want to borrow £5,000, you’ll need to know you’re getting a good deal. That’s where we come in. We can explain the options available before you use our loan comparison service.
How long should I take to repay the £5,000?
If you borrow over a longer period, it could mean your monthly payments are more manageable. But this will also add to the interest you’ll pay overall.
Here’s an example of a typical loan taken out over three and five years.
|Initial borrowing||APR||Time to repay||Monthly repayments||Total repaid|
To avoid putting pressure on yourself, it’s always better to borrow only what you can comfortably afford to repay. Borrowing too much can lead to debt spiralling out of control.
What types of loans are there?
A £5,000 loan is generally at the top end of what many credit cards will offer, so a loan can potentially be a better option. To make sure you get the right loan for your needs, consider the available options.
You won’t need to put down an asset as security, but interest rates can be higher, and you’ll typically need a good credit score to have your application approved.
May offer lower interest rates, but you’ll need to put up your home as security.
A friend or family member with a good credit rating must promise to pay off the loan if you can’t – an option if you have bad credit.
Comparethemarket Limited 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.
Can I get a £5,000 loan with bad credit?
Yes, it’s possible to get a £5,000 loan if you have a bad credit history or no credit history, but your options will be limited and you’re likely to be charged a high rate of interest. If you can’t find a mainstream lender prepared to offer you a loan, you may have to use a specialist lender.
You might also want to consider a guarantor loan. In this case, you’ll need someone with a good credit rating – a parent or family friend – to guarantee that they’ll pay off the loan if you default on the payments.
Guarantor loans typically range from £1,000 up to £10,000, so it’s a possible option if you want to borrow £5,000. Loans with a guarantor usually have a lower interest rate than bad credit loans, as there’s less of a risk that the loan won’t be paid off. However, the interest rate will still be much higher than a standard loan.
What should I consider when choosing a £5,000 loan?
Before you start comparing £5,000 loans, you should consider:
- Annual Percentage Rate (APR) – this is the total amount you’ll pay for the loan over the year, including interest and standard charges. Be aware, you might not get the advertised rate. If it’s a ‘representative’ APR, providers only need to offer it to 51% of their customers – typically those with the best credit ratings. However, if you see a loan advertised with a ‘guaranteed’ APR, then this is the rate you should get.
- Total cost of the loan – spreading your loan over a longer period may mean cheaper monthly repayments, but as you’ll be paying interest for longer, it will cost you more overall. Our loan calculator can help you work out how much you’ll pay.
- Monthly repayments – make sure you can comfortably afford the repayments each month, and you won’t be left short and struggling to pay.
- Early repayment charge – if there’s a chance you could pay off your loan earlier, check if there’s early repayment charge (ERC). When you compare through us, you’ll be able to see which lenders charge an ERC and which ones don’t.
How do I apply for a £5,000 loan?
You can apply for a £5,000 loan in person, by phone or online via the lender’s website or app.
When you apply for a loan, the lender will carry out a hard credit search to check your financial situation and history. This will leave a mark on your credit file that other lenders can see. If you’re turned down for a loan and keep applying elsewhere, it could damage your credit rating as lenders may think you’re in financial difficulties.
Before you apply for a loan, use our eligibility checker to see which loans you’re most likely to be accepted for. We’ll carry out a soft search that lenders can’t see, so it won’t affect your credit score in any way.
It’s a good idea to check your credit score before you apply for a loan, to see what shape it’s in. The higher your credit rating, the more likely you are to be accepted for a loan. A good credit rating can also bag you a better rate of interest.
How can I compare loans quickly and easily?
All you have to do is give us a few details and we’ll show you a list of loans you’re likely to be accepted for – without impacting your credit score.
You can compare information like the total amount repayable and monthly repayments to quickly find the £5,000 loan that’s right for you. You’ll also be able to see if that lender allows debt consolidation and payment holidays, and if there are any early repayment charges.
Frequently asked questions
How quickly can I receive my £5,000?
Once your loan approval goes through, the money should arrive in your bank account quite quickly – in some cases, on the same day. Online applications are typically quicker than if you’ve applied by phone or post.
Can I pay a £5,000 loan off early?
It depends on the lender. Some won’t charge you anything and you can pay off your loan early, in part or in full. Others may charge an early repayment fee. When you compare through us, you’ll be able to see which lenders charge an ERC or not.
Can I use a £5,000 loan to pay off other debts?
If you’re being charged a high rate of interest on other debts, like credit cards or store cards, it might be worth combining them into a single debt consolidation loan with a lower interest rate.
Just be aware that you’ll still be taking on debt, and if you’re tempted to keep on spending then it might not be the right solution for you.
What should I do if I’m struggling to pay back my £5,000 loan?
If you’re struggling financially and can’t make the repayments, contact your lender as soon as possible. They may be able to offer a more affordable repayment plan. You might also find it helpful to speak with a debt advisor. The Moneyhelper website can help you find free debt advisory services near you.
The content written in this article is for information purposes only and should not be taken as financial advice. If you require support on the products discussed here, please speak to your bank/lender or seek the advice of an independent professional financial advisor. We also have more information on our Customer Support Hub.