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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. If you borrow £5,000 upfront, then pay it back in monthly instalments, you can spread the cost more easily.

But whatever your reasons for taking out a loan, it’s essential to budget carefully and 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 a £5,000 loan?

If you borrow £5,000 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.

The following table is for illustrative purposes only. It gives you an idea of how much it could cost you to take out a £5,000 loan over two, three and five years:

Loan term APR Monthly repayments Total interest paid Total cost of loan
£5,000 loan over 2 years 10.9% £231.63 £559.05 £5,559.05
£5,000 loan over 3 years 10.9% £162.25 £841.16 £5,841.16
£5,000 loan over 5 years 10.9% £107.20 £1,431.92 £6,431.92

As you can see, monthly repayments for a £5,000 loan over two years will be higher than for a £5,000 loan over three or five years. But you’ll be paying less interest overall, so the total cost of your loan will be cheaper.

To avoid putting pressure on yourself, it’s always better to borrow only what you can comfortably afford to repay each month. Borrowing too much can lead to debt spiralling out of control.

Remember, cheap loans for £5,000 may not always be the best for your circumstances. It’s important to consider all the options available to you.

Loan calculator

If you’re thinking about taking out a loan, use our loan calculator to work out how much you can afford to borrow and how much it will cost each month.

Loan calculator

What types of £5,000 loans are there?

To make sure you get the right £5,000 loan for your needs, consider the available options.

Personal unsecured loans

You won’t need to put down an asset as security for a personal, unsecured £5,000 loan. But interest rates can be higher, and you’ll typically need a good credit score for your application to be approved.

While the lender can’t seize collateral, continuously missing repayments could land you in court. This could lead to debt collectors seizing assets to pay off the debt.

Homeowner secured loans

May offer lower interest rates, but you’ll need to put up your home as security. This means your home could be repossessed if you can't keep up with your repayments.

Guarantor loans

A friend or family member with a good credit rating must promise to pay off the loan if you can’t. A guarantor loan could be an option if you have bad credit.

You can’t compare guarantor loans with Compare the Market.

Debt consolidation loans

Could help you manage your finances more easily by combining your existing debts into one monthly payment plan, with a single interest rate. However, you’ll be paying interest for longer, so it could end up costing you more overall.

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 poor credit. But your options will be limited and you’re likely to be charged a higher rate of interest. If you can’t find a mainstream lender prepared to offer you a £5,000 loan for bad credit, you may have to use a specialist lender.

If you’re looking for a £5,000 loan for bad credit, you may want to consider a guarantor loan. 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 higher than a standard loan.

Will a £5,000 loan affect my credit score?

Applying for any type of loan will affect your credit score. When you apply for a £5,000 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. If lenders see multiple applications on your credit file, they may think you’re in financial difficulty.

After you’re accepted for a loan, you’ll harm your credit score if you don’t keep up with your repayments. But if you pay on time every month, you could improve your credit rating.

What should I consider when choosing a £5,000 loan?

Before you start comparing £5,000 loans, consider:

Annual Percentage Rate (APR)

The APR 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 you’ll be paying interest for longer, so 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 £5,000 loan repayments each month.

Early repayment charge (ERC)

If there’s a chance you could pay off your loan early, check if there’s an early repayment charge (ERC). Some lenders won’t charge you anything and you can pay off your loan early, in part or in full. Others may charge a penalty fee.

When you compare £5,000 loans through us, you’ll be able to see which lenders charge an ERC.

Am I eligible for a £5,000 loan?

To be eligible for a £5,000 loan, you’ll need to meet the eligibility criteria of the lender. Typically, you’ll need to be:

  • Over 18 years old
  • A UK resident
  • Employed.

Lenders will also consider your income to see if you can comfortably afford your repayments. A hard credit search will help them assess whether there’s a risk of you defaulting on your repayments. They’ll use the information on your credit file to decide whether to offer you a loan and, if so, what terms and conditions will be applied.

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.
Before you apply for a loan, use our eligibility checker to see which 5K 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.

Top tips for getting the most out of your £5,000 loan

Check your credit score – 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 get you a better rate of interest.

Make a plan – having a specific plan of how you intend to spend the money will help you avoid using it for other expenses. You don’t want to find yourself having to borrow more because you don’t have enough to cover your original costs.

Pay on time, every time – careful management of your repayments shows you’re a responsible borrower. Over time, it can help improve your credit score. Setting up a direct debit or standing order could help you avoid missed or late payments.

Pay back the loan as soon as you can – if you can comfortably afford the monthly repayments, try to pay back the loan in the shortest time possible. You’ll save money by paying less interest overall.

Protect your income – if you’re sick, injured or made redundant, income protection insurance could help cover your loan repayments until you’re able to return to work.

How can I compare £5,000 loans quickly and easily?

Just 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 the 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 loan?

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 use a £5,000 loan to pay off other debts?

Yes, you could use a £5,000 loan to pay off other debts. If you’re being charged a high rate of interest on existing 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. If you’re tempted to carry 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 your £5,000 loan 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.

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Page last reviewed on 24 SEPTEMBER 2024
by The Editorial Team