Compare £1,500 loans

Whether the clutch has gone on your car or you need a new boiler, a £1,500 loan can give you the financial help you need to get things done. But how long will it take to repay a loan and are there any cheaper alternatives? 

Whether the clutch has gone on your car or you need a new boiler, a £1,500 loan can give you the financial help you need to get things done. But how long will it take to repay a loan and are there any cheaper alternatives? 

Anelda Knoesen
From the Money team
minute read
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Posted 27 SEPTEMBER 2021

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, like repairing your car or paying an urgent bill. 

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. It can be a quick way to get your hands on some much-needed cash.

What types of £1,500 loan are there?

There are several types of loan available if you need to borrow £1,500, including: 

  • Personal loans – monthly repayments are usually fixed over a period of one to five years. Personal loans are unsecured, which means they’re not borrowed against an asset like your home. 
  • Car loans – car finance comes in several guises, including an unsecured personal loan and a hire purchase loan, which is secured against the vehicle you’re buying. 
  • Guarantor loans – you can ask a close friend or family member with a better credit score than you to guarantee your loan and promise to pay off the debt if you can’t.
  • Payday loans – these are quick and easy to get online and from high street shops, but banks don’t offer them. Payday loans can provide a short-term cash fix, but they often have eye-wateringly high rates of interest. We don’t offer this type of loan on our site. 
  • Credit union loans – a credit union is a co-operative where members pool their savings to lend to one another. Eligibility criteria for this type of loan might involve living in a local area, working in a particular industry or belonging to the same church.  

What is the interest rate on a £1,500 loan?

A small loan of £1,500 is likely to have a higher interest rate than a loan for a larger sum of money, borrowed over a longer period. That’s because, to lenders, a small loan could look like you don’t have any savings to fall back on, plus the loan isn’t secured against an asset.  

The interest rate on a loan will usually be expressed as an annual percentage rate (APR). This shows the total cost of borrowing over a year as a percentage, including any fees. 

Lenders will often advertise the ‘representative APR’. While this is useful for comparing loans, it’s not necessarily the rate you’ll get. At least 51% of successful applicants must get the representative rate, but that means the rest could be offered a higher rate of interest.  

Some lenders are now offering guaranteed loan rates. This means that you’ll definitely get this rate of interest if you’re accepted for the loan and you’ll know exactly how much the loan will cost you to repay. The lender will decide what guaranteed rate to offer you using your credit score and the financial information you supply when applying to see if you’re eligible for the loan.  

Find out more about APR and why it matters

How long will it take to repay a £1,500 loan?

Smaller personal loans are typically repaid over a period of 12 months to five years. The catch, of course, is the interest that’s added on top of the repayment plan. 

So, while it might seem cost-effective to reduce your monthly repayments by stretching your loan over a longer period of time, you can end up paying more overall when all the interest adds up.  

Here’s an example of a typical loan taken out over one and two years to compare the cost: 

Initial loan



Monthly repayments

Total repayments


12 months





24 months




The general rule is to borrow as little as possible and pay it back as quickly as possible. You can use our free loan calculator to work out how much you might need to repay each month if you take out a £1,500 loan.

Why it’s important to consider how much money you need 

Knowing how much you need to borrow will help you decide where best to find that extra cash injection. 

  • If you only need to borrow a small amount of money for a very short time, consider using your interest-free overdraft, if you have one. If not, it could be worth looking at different current accounts that offer this facility.
  • Credit cards with 0% interest on purchases could be worth a look, particularly if you need to buy something specific. As long as you pay back what you owe within the interest-free period (and make at least the minimum monthly payments on time), you can be smug in the knowledge that the credit hasn’t cost you a single penny extra. 

If you need a larger sum of money, a personal loan could be the answer. You can usually opt to borrow a minimum of £1,000, with upper limits depending on the lender. Most will lend you up to £25,000, although some may go as high as £50,000. 

The best APRs (annual percentage rate – this is the amount of interest, plus any fees, you pay on top of your loan) are reserved for customers with the best credit ratings. That’s why when you apply for a loan, you need to know that the APR you see might not be the one you get, unless it’s labelled as a guaranteed rate.

Is it possible to repay all or part of my £1,500 loan early?

Yes, most loans can be paid back early or you can make a partial overpayment – however the lender may charge you for doing this. 

If you want to make a partial overpayment, then a 28-day notice period applies. This means 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. 

Frequently asked questions

Can I get a £1,500 loan with bad credit?

A poor credit score doesn’t automatically mean you’ll be refused a loan, but your choices may be limited.  

You might have a poor credit rating if you've fallen behind on payments, been declared bankrupt or received a CCJ (county court judgment). This is a court order that's registered against someone for not making payments on money they owe. If this is the case, then usually a loan for bad credit can be the easiest way to gain access to funds. But it’s likely you’ll pay a much higher rate of interest than someone with a good credit score. 

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

How do I apply for a £1,500 loan?

You can apply for a £1,500 loan at your local bank, over the phone or online by giving a few details about yourself and proof of income. If you apply online, the money could be in your account within hours, although the lender will need to run a credit check first. 

Every time you apply for a loan, it will show up on your credit file, so you don’t want to make too many applications in a short space of time as it sets alarm bells ringing with lenders. So, it’s worth checking whether you’ll be approved before applying. 

You can use our loan eligibility checker to find out which loans you’re likely to be accepted for before you apply. It’s a soft check so won’t affect your credit score. 

Are there other ways to borrow £1,500?

Before you apply for a loan for £1,500, you might want to consider these alternatives first: 

  • 0% purchase credit card – this lets you spend without having to pay interest on your purchases for a set period. Just make sure you pay off the full balance before the 0% period ends as the APR is likely to shoot up sharply after that. 
  • Arranged overdraft – your bank may be willing to offer you an arranged overdraft. This lets you borrow money through your current account by spending more than you have in the account. Students are most likely to benefit from this option as they can get interest-free overdrafts. 

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