Compare £2,000 loans

If your cash flow is more ebbing than flowing, then a £2,000 loan could be what you need to tide you over.

If your cash flow is more ebbing than flowing, then a £2,000 loan could be what you need to tide you over.

Alex Hasty
Insurance and finance expert
6
minute read
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Last Updated 1 NOVEMBER 2022

Is a £2,000 loan right for me?

Perhaps you need to make urgent repairs to your car or home. Or maybe you’re being financially savvy and plan to use a £2,000 loan to consolidate your existing debts into one.

Whatever your reasons, you need to make sure a loan for £2,000 is really what you want and have a solid repayment plan in place to pay it back.

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 purchases could be worth considering, 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 rest 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 best 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) – 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 advertised as a guaranteed APR.

How long will it take to repay a £2,000 loan?

Personal loans can typically be repaid over a period of one to 10 years – you can choose how long you want to borrow the money for. But while it might seem attractive to drive down your monthly repayments by stretching your loan over a longer period of time, you can end up paying more in the long run when all the interest adds up.

Here’s an example of a typical loan taken out over two and three years:

Initial loan Time APR Monthly repayments Total repayments
£2,000 24 months 20.9% £100.94 £2,422.56
£2,000 36 months 20.9% £84.39 £2,531.70

The golden rule is to borrow as little as possible and pay it back as quickly as possible. Always base your loan on an amount you can easily afford to repay – this will save you money and time in the long run. Keep an eye on your proposed timeline too.

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.

Will I get the representative APR rate?

The APR – or annual percentage rate – shows the total cost of the loan over a year, including interest and other standard charges. It’s useful for comparing loans. But if the APR is ‘representative’ it’s not necessarily the rate you’ll get. In fact, only 51% of successful loan applicants get the advertised representative rate. The actual rate you receive depends on your individual circumstances and credit history.

Learn more about APR and why it matters.

Can I borrow £2,000 if I have bad credit?

It’s not impossible to get a £2,000 loan if you have a bad credit history, but your options might be limited. You might also be charged a higher interest rate.

If you’re having trouble securing a loan because of bad credit, you might want to consider a guarantor loan. You’ll need someone with a good credit rating who will act as your guarantor and promise to pay off the loan if you can’t make the payments. While guarantor loans usually have a lower interest rate than bad credit loans, the APR is still much higher than standard loans.

Top tip

If you’ve been refused a loan because of bad credit, focus on improving your credit score before you apply again. If you take control of your finances and pay your bills on time, it can take around six months to build up your credit score.

Are there other ways to borrow £2,000?

If you’re not sure about taking out a loan for £2,000, you might want to consider other options:

  • 0% interest credit card: if you need to make an expensive purchase, a 0% purchase credit card lets you pay up front then spread the cost over a set period without having to pay interest. Just make sure you can pay off the full balance before the 0% period ends or you’re likely to be stung with high interest charges on what you owe.
  • Money transfer credit card: lets you transfer money into your bank account without the need for a loan. Although many money transfer cards offer a 0% interest period, you might be charged a transfer fee – typically around 1% to 4%. You’ll also need to make sure you pay off the full balance before the 0% period ends – after that, you’ll be charged interest on the remaining balance.
  • 0% balance transfer credit card: an alternative to a debt consolidation loan, this type of card lets you transfer existing credit card debts onto one card with 0% interest for a certain period. Again, you should aim to pay off the full balance before the 0% ends or you could be hit with high interest charges on what you owe.

How do I apply for a £2,000 loan?

You can apply for a £2,000 loan at your local bank, over the phone or online. Applying online is probably the fastest way – the money could be in your account within hours, especially if you’re applying for a loan with a lender you already bank with.

Be aware that a loan application will show on your credit report. If you’re turned down or make too many loan applications in a short time, it could damage your credit rating. This is because lenders may think you’re in financial difficulties. So, it’s worth checking whether you’ll be approved before applying.

By using our eligibility checker you can find out which loans you’re likely to be accepted for before you apply. It’s a soft check and won’t affect your credit score at all.

Find out if you’re eligible for a loan

Compare loans – the easy way

Trying to find the right type of loan can be a challenge. Luckily, our comparison service is here to make it as simple as possible by allowing you to easily see all the relevant loans for you. You can also see any age limits and if the lender will allow debt consolidation loans.

Use our loan eligibility checker to see what loans you might be accepted for without it harming your credit rating.

Frequently asked questions

What credit score do I need to borrow £2,000?

You will usually need a fair to good credit score to get a £2,000 loan. However, the UK’s three main credit reference agencies (CRAs) all score differently, so it’s down to individual lenders to decide if you meet their criteria. 

How do I check my credit score?

You can check your credit score with a credit reference agency.  Credit companies like Experian, Equifax and TransUnion will be able to share your credit report. Your credit score is usually available for free, but, to access your full report, you may need to pay amonthly fee, after a trial period.

If the loan is approved, when will I get the money?

If you apply online, once approved, the money could be in your bank account within hours. If you apply by phone or by post, it could take longer. 

Can I pay my £2,000 loan off early?

Some lenders will let you pay off your loan early, in part or in full, without penalty. Others may charge an early repayment fee (ERP). It’s important to check this if you want the flexibility of paying off your loan whenever you want. 

When you compare through us, we’ll show you the features of each loan, including whether an ERP applies or not.

Should I take out a payday loan to borrow £2,000?

You should think very carefully about taking out a payday loan. They can be an expensive way to borrow money. Interest rates can be incredibly high and penalty fees are harsh. While £2,000 may seem like a fairly small amount to borrow, if you can’t pay back what you owe in full with interest and charges by the end of the month, your debt could quickly spiral out of control.

Comparethemarket doesn’t offer a comparison service for payday loans.

Visit the Moneyhelper website for more information and helpful advice on alternatives to payday loans.

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