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Compare £5,000 loans

Compare £5,000 loans

Provided you choose the right solution for you, a £5,000 loan can help ease cashflow problems. We can help you find the right £5,000 loan for you, even if you’ve previously had bad credit.

Anelda Knoesen
From the Money team
minute read
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Posted 21 NOVEMBER 2019

Is a £5,000 loan right for me?

Whatever your reasons for taking out a loan, it’s essential that borrowing is always carefully budgeted for and that you have a solid repayment plan in place. 

If you’re sure you want to borrow £5,000, you want to know you’re getting the best possible deal. This is where we come in. We can guide you through the process before you use our loan comparison service.

How long should I take to repay the £5,000?

If you borrow over a longer period it can mean monthly payments are more manageable. But it can massively increase the interest you’ll pay overall. 

Here’s an example of a typical loan over 2-7 years: 

Initial borrowing APR Time to repay Monthly repayments Total repaid
£5,000 13.9% 2 years £240 £5,712
£5,000 13.9% 7 years £99 £8,284

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

What types of loans are there?

A £5,000 loan is generally at the top end of what many credit cards will offer, so a loan can potentially be a better option. To make sure you get the right loan for your needs, find out what options to look out for before comparing. 

  • Personal unsecured loans are for a fixed amount and term, and monthly repayments are usually fixed. They are usually for smaller amounts and aren’t secured against an asset, such as your home, but normally charge a higher rate of interest than secured loans. 
  • Homebuyer secured loans are secured against your property, so you must be a homeowner (either own outright or have a mortgage) to take one out. These loans tend to have lower interest rates, but your home is at risk if you can’t make the repayments. You might have to pay an arrangement fee, so you'll need to take that into account when you compare costs.
  • Guarantor loans – this is where someone else guarantees your loan and promises to pay the debt if you can’t.  
  • Payday loans can provide a short-term solution to cash shortfalls. They’re unsecured loans, meaning no collateral like your house or car is required to get one. But the downside is the very high rates of interest. We don’t offer this type of loan on our site. You’d typically use a payday loan to bridge the gap between the time you run out of money, to the time you get paid again.
  • Installment loans – these are repaid regularly over a long period of time, so you get a better interest rate. They are typically for larger amounts than payday loans. If you need a £5,000 loan with flexible terms, and you’re unable to pay the loan off straight away, you may prefer an installment loan.  

When it comes to a loan for £5,000, it’s important you take your time figuring out exactly how much you can afford each month. If you can’t repay your loan you risk being taken to court, and if you miss payments or even make late payments your credit record can be damaged, so it's essential that you find an affordable option that’s right for you.

Should I beware of ‘representative’ APR rates?

Yes. Always remember, ‘advertised’ loan and credit card rates are representative. 

In fact, only 51% of successful loan applicants need to get the advertised rate. Your actual rate will be tailored according to your unique credit history. 

Learn more about APR and why it matters

Will being rejected for a loan affect my credit rating?

Yes, it could do. Each loan application leaves a mark on your credit report. It’s important that if you’re refused credit, you try to find out why before making other applications. 

It’s wise not apply to lots of places at once as lenders may become concerned that you may have financial difficulties, or that you might be committing fraud. 
The good news is that using our loans comparison service and seeing the various options available helps you understand what's on offer from different lenders.

How can I compare loans quickly and easily?

Trying to find and compare the merits of numerous lenders can take a while. Luckily, we can help you with our simple loans comparison service.

It lets you quickly compare information such as provider, product, representative APR, total amount repayable and monthly repayments, to find the £5,000 loan that’s right for you quickly. You'll also be able to see if that lender allows debt consolidation, whether payment holidays are allowed and if there are any early repayment charges.

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