Why choose a £1,500 loan?

A £1,500 loan is normally known as a short-term loan because it's not considered a particularly high sum of money. At least in terms of lending, that is. 

A £1,500 loan is normally known as a short-term loan because it's not considered a particularly high sum of money. At least in terms of lending, that is. 

Anelda Knoesen
From the Money team
2
minute read
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Posted 20 NOVEMBER 2019

So why get a £1,500 loan?

Because life can often throw a spanner in the works, a loan for £1,500 is usually taken out to cover unexpected emergencies, such as repairing your car or paying an urgent bill.

 

Getting a £1,500 loan with bad credit

There's a common trend with short-term £1,500 loans being the loan of choice for people with bad credit. If you've fallen behind on payments and even received CCJs (County Court Judgement, a court order that's registered against someone who's not making payments on money they owe), then usually a loan of up to £1,500 can be the easiest way to gain access to some funds.

And of course, repaying your loan for £1,500 on time can also be a good way to boost your poor credit score.

Quick and easy loans

Plus, £1,500 loans are usually a quick-fire way to get your hands on some much-needed, last-minute cash. If you've run out of your wages for the month and the next payday is still too far away, then a short-term loan is a way of obtaining some money quickly. Unlike applications for bank overdrafts or credit cards, which can be a long and drawn out process, applying for a short-term loan of £1,500 can be quick, easy and hassle-free.

Repayments on a £1,500 loan

Short-term personal loans usually range from anything between £100 and £1,500, and the monthly repayments can often be spread across 18 months. The catch, of course – since money isn't free – is the interest that's added on top of the repayment plan.

So if you took out a £1,500 loan and decided to repay it over an 18-month period, then the amount of interest you pay on this funds will be higher  If you repay your loan for £1,500 over a shorter period (six months for example) then the interest you pay should be lower  

So when you’re considering taking out a loan for £1,500, there are a few questions you need to ask yourself:

  • How much do I actually need?
  • Do I really need the cash?
  • How long will I need this money for and how long will it take me to pay it back?
  • Can I afford the repayments?

Should I speak to my lender first?

Yes. If you want to make a partial overpayment, then a 28-day notice period applies. You’ll be charged interest on the full amount you owe for 28 days after you notify your lender of an extra payment.

If you want to pay your loan off in full, you’ll need to ask your lender for an ‘early settlement amount’, which is a recalculation of what you owe based on:

  • what you’ve already paid and the amount you still owe
  • what interest charges apply
  • whether there are any early payment fees.

Your lender’s obliged to give you this figure if you ask for it and to give you at least 28 days to think it over. If you decide to go ahead, you’ll need to pay the outstanding early settlement amount by the settlement date the lender has given you – otherwise it will need to be recalculated.

If you don’t ask the lender for the figure, you may end up paying the wrong amount.

You don’t have to pay off the loan if you decide you’d be better off continuing with your monthly instalments.

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