Compare £10,000 loans

Whatever the reason, borrowing £10,000 is a big financial commitment. So you need to be sure you can get the most reasonable APR and a monthly repayment you’re comfortable with.

Whatever the reason, borrowing £10,000 is a big financial commitment. So you need to be sure you can get the most reasonable APR and a monthly repayment you’re comfortable with.

Anelda Knoesen
From the Money team
7
minute read
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Posted 20 SEPTEMBER 2021

Is a £10,000 loan right for me? 

If you’re planning a new kitchen, paying for a wedding or want to buy a new car, a £10,000 loan could be just what you need to make up the shortfall. However, £10,000 is no small sum. Lenders will most likely expect you to have a good – perhaps even excellent – credit rating before considering your application.

You’ll also want to ensure you have a solid repayment plan in place and that you’re comfortable with the monthly repayments.

How much does a £10,000 loan cost? 

£10,000 is a pretty large sum to borrow and you risk building up a larger debt if you struggle to repay it. You’ll want to work out what you’ll be expected to pay each month as well as the overall cost of the loan. 

As with all loans, the longer you stretch it out, the more manageable your monthly repayments will be. However, with the added interest, you’ll end up paying more in the long run. 

Decide what suits you best: cheaper monthly repayments over a longer period or a shorter timeframe with a loan that will cost you less overall.

Here’s an example to give you an idea of how much a £10,000 loan could cost over three and five years**:   

Initial Loan

Time

APR

Monthly Repayments

Total Repayments

£10,000

3 years

5%

£299.21

£10,771.58

£10,000

5 years

5%

£188.20

£11,292.24

 

**Calculations were made using Compare the Market’s Loan calculator. Figures are for illustrative purposes only, to give an idea of how much a £10,000 loan would cost based on an example interest rate.  

To avoid having a large loan looming over you, only borrow an amount you can happily afford to repay. The last thing you want is a big chunk of money eating into your budget each month or a heavy debt spiralling out of control.

What types of £10,000 loans are available? 

There are various types of loan available, but for £10,000 the best options are: 

  • Unsecured personal loan - Tends to be for a fixed amount and term, with fixed monthly payments, so you know exactly what you’re paying and for how long. You won’t need any assets as security, so it’s a good choice if you rent a property. However, as you’re not offering any security, interest rates may be higher than with a secured loan.
  • Secured loan - Secured against an asset, such as your car, or even the equity in your home. Lenders see secured loans as less of a risk, so they tend to offer lower interest rates than for unsecured loans.
  • Homeowner loan - This involves borrowing a lump sum against your property, typically for larger amounts up to £100,000. Interest rates may vary so it could be hard to budget each month. You’ll also need to be a homeowner or have a mortgage to take out this type of loan. If you fall behind on your repayments, you risk losing your home so it’s no small undertaking.

How long will a £10,000 loan take to pay back? 

A personal loan can usually range from 1 to 10 years. You’ll be able to choose how long you want to take out the loan for when you apply.

As we’ve said, the longer you take to pay back the loan, the lower your monthly repayments should be. But it also means you’ll be paying interest for longer, so the overall cost of your loan will be more than if you paid it off sooner, in larger amounts.

 Pick a term length that lets you comfortably pay the monthly repayments without causing any financial stress. There’s no point in taking on a large loan if you find yourself struggling to pay it back each month – that road leads to mounting debt. 

Our handy loan calculator gives you a rough idea of how much your monthly repayments will be, based on the interest rate and length of the loan. You can play with the figures and adjust the interest rate and term length to see how it affects your monthly repayments and overall cost.

Can I get a £10,000 loan if I have bad credit? 

While it’s not impossible to get a £10,000 loan with bad credit, your options may be limited. You might also find the interest rate you’re offered is less than competitive. That’s because lenders consider borrowers with poor or no credit history a higher risk. They want the assurance that you’ll be able to pay back the loan on time and in full.  

If you have a bad credit rating, you may have more luck getting a secured loan using an asset like your car or home as security. Lenders are more likely to lend you the money knowing they can recoup their losses if you fail to pay it back. 

It’s also possible to borrow £10,000 with a guarantor loan. You’ll need to find someone with a good credit rating who will ‘guarantee’ to pay back the loan if you can’t make your payments – usually a parent or close friend. 

The simplest option might be to build up your credit score and put off applying for credit until it’s improved.

How can I compare loans? 

Use our simple and quick comparison service to compare a range of available loans for £10,000.

We’ll help you compare representative APRs, repayment amounts and other important information like potential early repayment penalties.

Using our price comparison service is an ideal way to compare loans and test your eligibility without it affecting your credit score.

Frequently asked questions

Can I pay off my 10K loan early?

While all lenders will let you pay off your loan early, some may charge an early repayment fee. Under the Consumer Credit Regulations 2004, lenders can charge you up to two months interest for early settlement.

Check the small print for any early repayment charges if you decide to pay it off early, as it’s something that can be easily overlooked when taking out a loan.

What happens if I miss a loan payment?

If you miss a loan repayment, your lender could charge a late fee and extra interest on the rest of your repayments.

What if I’m struggling to pay back a loan?

If you’re struggling to make the monthly repayments, speak to your lender as soon as possible. They might give you extra time to repay, reduce the interest on missed payments or work out a more manageable payment plan. 

If you’re having debt problems, you can find out what options are available on the GOV UK website. You can also get free debt advice from the Money Helper.

What happens if I’m rejected for a £10K loan?

If your application for a £10,000 loan is rejected, it will likely have an impact on your credit score. Whatever you do, don’t apply for another loan straight away as you’ll probably be refused again. This will lower your credit score even further.

Give yourself time to rebuild your credit rating. It will improve your chances of being accepted next time around. 

Our eligibility checker can help you see which loans you’re likely to be accepted for before you actually apply. It’s a soft search that won’t affect your credit score in any way.

What else should I look out for when applying for a £10,000 loan?

There’s a few other things to consider before applying for a loan: 

  • Be wary of ‘advertised’ interest rates (APR). These are only representative, often as low as 2.8%, and are usually only offered to customers with the best credit ratings. Lenders are only obliged to offer their cheapest rates to 51% of loan applicants. Learn more about APR and why it matters.
  • A loan application can affect your credit rating. Lenders will perform ‘hard checks’, especially if you’re applying for an unsecured loan. These will be logged on your credit report. Applying to lots of lenders or for credit too often will leave a trail on your credit report and damage your credit rating. Before you start applying, check your credit report to see if it’s in good shape. You can get your Experian Credit Score from us, for free, in the Meerkat app. Alternatively, you can get your score by using a credit reference agency or another provider. You can check your score as often as you like without it affecting your credit rating.
  • Not all lenders charge early repayment penalties, so it’s something to consider when comparing loans if there’s a chance you may be able to pay it back earlier.

Our top tips 

  • Use our loan calculator to get an idea of how much a £10,000 will cost you.
  • Only borrow what you can comfortably afford to pay back.
  • Check your credit rating before applying for a loan.
  • Use our ‘soft search’ eligibility checker to see which loans you could be eligible for before applying.
  • Always check the terms and conditions for extra charges and fees.

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