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A small loan is a type of personal loan that lets you borrow a relatively small amount of money. Most lenders consider anything from £500 up to around £3,000 to be a small loan. You can compare loans from £1,000 with Compare the Market.
Small personal loans are typically unsecured, meaning you don’t have to put up an asset (such as your home) as security for the lender.
That depends on the market at the time you apply and your circumstances. But it’s important to note that interest rates on smaller loans tend to be higher than on larger loans.
Did you know?
If you compare unsecured small loans with Compare the Market, the interest rate could range from 5.3% to 99.9% depending on your circumstances2.
Here’s how to get a small loan:
Use our loan eligibility checker to see which loans you’re most likely to be accepted for. It’s a soft credit check, which won’t affect your credit score in any way.
If you find a loan that meets your needs, click through to the lender’s site and apply directly.
The lender will look at your income, outgoings and employment status, and check your credit score. This is a hard credit check, so it will show on your credit report.
If your application is successful, the money will be paid directly into your bank account – usually within one or two days.
You pay back the loan in monthly instalments, plus interest, over a set term, until you’ve cleared the full amount.
Our loan calculator can give you a rough idea of how much a small loan could cost. It helps you work out your monthly loan repayments and how much you could borrow.
If you’re borrowing a relatively small amount of money, it may be possible to get a small loan with bad credit. If you can’t get a loan from a mainstream lender, a loan provider that specialises in bad credit loans might be able to help.
Lenders usually charge high interest rates on small loans if you have bad credit, because they view borrowers with poor credit histories as high risk.
No, it’s almost impossible to get any kind of loan without undergoing a full credit check. Be very wary if you see ‘no credit check’ loans advertised online. These will most likely be from unregulated lenders
When you apply for a loan, always make sure the lender is authorised by the Financial Conduct Authority (FCA). You can find out if a lender is authorised by searching the Financial Services Register. (All the lenders on our site are approved by the FCA.)
The good news is that you can improve your chances of passing a credit check and being accepted for a small loan by building your credit score.
A small loan can help you cover a range of costs, whether you’re buying a car or tackling home improvements. It could also help pay for an unexpected emergency, such as urgent repairs to your boiler.
Some people use a small loan to consolidate existing debts into one monthly repayment.
It’s always best to check the conditions of a small loan before you apply, to see if the lender imposes any restrictions on how the money can be used. You can’t use a small loan for gambling or illegal activities.
And you need to be confident that you can make the repayments on time, every month. If you don’t, you risk damaging your credit score and your chances of getting credit in the future.
To be eligible for a small loan, you’ll typically need to be a UK resident over 18 years old (for some lenders you’ll need to be over 21). You’ll also need to provide the following:
Details of your income and outgoings
Your address history and employment details
Your bank or building society details.
A 0% interest on purchases credit card lets you buy items upfront, then pay off what you’ve spent over a set period without paying interest.
You’ll need to pay at least the minimum payment each month. But if you clear your debt before the end of the 0% period, the credit won’t cost you anything.
Depending on your bank, you may be able to agree an overdraft at a low interest rate. Some banks offer current accounts with an interest-free overdraft buffer for a fixed period.
But remember an overdraft is not free money. You need to pay it back.
Discover how they work, what you could use them for and tips for keeping borrowing costs in check
Small loans typically have repayment terms that range from three months up to five years. The exact length of a small loan depends on the lender, the amount you borrow and your credit history.
No. Payday loans are usually for small amounts, from around £50 to £1,500. But the money is typically borrowed over a very short period – such as one month – or until your next payday.
Payday loans come with extremely high rates of interest. If you can’t pay back the loan within the agreed period, the interest and fees will mount up.
MoneyHelper and Citizens Advice advise that you only consider a payday loan in an emergency, after considering alternative solutions.
Compare the Market doesn’t compare payday loans.
It might be more difficult to get a loan if you’re unemployed. Usually, lenders want evidence of a steady income before they’ll consider your loan application.
If you are able to get a loan with no income, it’s likely you’ll be charged a higher interest rate.
Just 1.8% of people who apply for loans through us are unemployed2.
Use our loan eligibility checker to see which loans you’re likely to be accepted for, without any impact on your credit score.
Sajni is passionate about finding money products to help you make great financial decisions. She keeps track of the latest trends and evolving markets to find new ways to help you save money.
1Based on Trustpilot ratings (July 2026).
2Correct as of June 2026.
Compare the Market 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.
What our expert says...
“If you’re considering a loan, you may be tempted to borrow a larger amount. But if you only need to borrow £1,500, why take out a loan for £3,000 when you'll have to pay interest on it? The golden rule is to only borrow what you need and pay it back as quickly as you can.”