What types of loans are there?
Make sure you get the right loan for your needs by finding out what options to look out for before comparing quotes. A £2,000 loan is small enough that if you are buying something, you might consider whether a 0% interest credit card could suit you. You'll need to be able to afford to pay it off during the interest-free period. If you prefer a loan then consider these options.
- Personal unsecured loans are for a fixed amount and term, and monthly repayments are usually fixed. They are not 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, (owned or mortgaged). These loans tend to have lower interest rates, but your home is at risk if you can’t make the repayments. Don't forget, these may have arrangement fees that will add to the total cost of the loan.
- Guarantor loans – this where someone 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 is required to get one, but have 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 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 £2,000 loan with flexible terms, and you’re unable to pay the loan off straight away, you may prefer an installment loan.
It’s important you work out exactly how much you can afford to pay back each month before you take out your £2,000 loan. Missing repayments can damage your credit score and you risk being taken to court.