Can I get a £5,000 loan?
Yes, it's possible to borrow £5,000, but approval depends on several factors, such as:
- Your credit history
- Your creditworthiness
- Your debt to income ratio
- Your income
Some lenders have stricter criteria than others, so you may find getting approved for a £5,000 loan from a highstreet bank more difficult than via a direct lender you find online.
Using a comparison site like ours will help you to find the lenders who are most likely to lend you money. Using our eligibility calculator, we’ll find the loan providers who are most suited for your circumstances.
Using our eligibility calculator won’t negatively impact your credit score, and will save you time applying for multiple loans. Instead, you can continue your application with confidence knowing we’ll only show you options suitable to your needs, without leaving lots of hard searches on your credit report, which can put some lenders off.
How do I know if I'll qualify for a £5k loan?
You'll need to meet some basic requirements to qualify for a £5,000 personal loan. Every lender has different eligibility criteria, but you'll need to be:
- Aged 18 or over
- A UK resident
- Receiving a regular income
You'll also need a bank account with a debit card and proof you're in full or part-time employment or have a steady income.
Many lenders and comparison sites provide an online eligibility checker, so you can quickly determine whether you qualify for a loan without impacting your credit report.
What can I use a £5,000 loan for?
Once you have the funds in your account, you are free to spend the money how you wish. Remember that you'll pay interest on your loan, so only borrow if you have no other resources, such as savings.
You may borrow £5,000 to:
- Buy a new car or put money towards one
- Fund a family holiday
- Help to fund a wedding
- Make home improvements
- Consolidate debts
This type of loan can also help to spread the cost of unforeseen expenses, and paying what you owe back in regular instalments can help you budget.
Where can I get a £5,000 loan?
You can get a £5,000 loan from a range of sources, such as:
- High street banks
- Building societies
- Direct lenders
- Credit unions
A financial comparison website like ours is an ideal place to start your search for a £5,000 pound loan. You can find a range of regulated lenders in one place and filter the results to suit your circumstances.
Using a comparison website like ours will ensure you can find the best £5,000 loan for your financial needs, because you can easily compare and contrast lenders.
How much will a £5,000 loan cost?
The overall cost of your £5,000 loan will depend on various factors based on your borrowing needs and financial circumstances. The most important are:
- The interest rate
- The amount you borrow
- The borrowing term (How long it will take you to repay your loan)
Here's an example
If you borrow £5,000 over three years with an annual percentage rate of 15% your monthly repayments will be £171.03. The total amount repayable over the full term of the loan will be £6,157.04, so the loan will cost you £1,157.04.
The annual percentage rate (APR) your lender offers you will be based on your credit rating and ability to repay the loan. For instance, a £5,000 bad credit loan will typically cost more than a £5,000 bank loan because the interest rate you’re charged is likely to be higher.
How long will I have to pay back a £5,000 loan?
It depends on the loan term in your credit agreement, but normally lenders offer £5,000 loans for between 12 and 60 months.
The longer your borrowing term, the more your loan will cost you, so you should carefully calculate what you can afford to pay each month.
Our online loan calculators can help you work out the best option for you based on your affordability.
How quickly can I get a £5,000 loan?
You can often get a decision within minutes. Some loan companies may deposit money in your account within a few days if you have a good credit score and can provide evidence of your identity, address and regular income.
Traditional lenders may take longer, but if your financial situation is straightforward, a loan may go through within hours.
What types of loans can I use to borrow £5,000?
There's a type of £5,000 loan to suit a range of financial situations. Loans you may come across are:
- Personal loans
- Secured loans
- Bridging loans
- Guarantor loans
- Car finance loans
- Bad credit loans
If you have a decent credit rating and a steady income, a personal bank loan will likely be your cheapest option. However, if you have a bad credit rating, then a £5k loan bad credit or a guarantor loan may be a better option. It’s important to do your own research and compare loans to make sure you apply for the right one for you.
What are the pros and cons of £5,000 loans?
A £5,000 personal loan can be a better alternative to credit card borrowing, allowing you to access funds quickly and budget for the cost of a major purchase or essential expense.
A £5,000 loan can help you:
- Spread the cost of purchases
- Cover emergency expenses
- Quickly solve short-term cashflow problems
- Plan regular repayments
- Consolidate existing debts
However, there are pitfalls to any form of borrowing, so it’s important to consider:
- Some types of £5k loans have very high APRs
- Your loan rate may be higher than advertised
- Your credit rating will plummet if you cannot repay the loan
- You'll pay penalties for late or missed payments
Are there any alernatives to £5,000 loans?
0% credit cards
This type of payment card allows you to use credit to pay for goods and services. New credit cards often come with an introductory 0% interest rate which means you can borrow for free for up to 24 months.
Interest rates can be high once the interest-free period ends, and you'll need a decent credit score to qualify. Depending on your credit history, it's likely your credit limit will be lower than £5,000, so you may not be able to borrow the full sum you need.
Secured loans are secured against an asset, such as your home. The value of your property is used as collateral, so if you fail to repay the loan, the equity in your home will be used to recover the debt.
They're usually used for borrowing large sums of money over a long term, but you may be able to borrow as little as £5,000 secured against your home, and they're sometimes easier to get if you have bad credit. However if you cannot keep up with the repayments, your home may be repossessed to cover what you owe.
Guarantor loans are a type of personal loan where a friend or family member guarantees that the loan repayments will be made if you can't repay the loan yourself. They're a good option if you have bad credit or an irregular income.
You could enjoy a lower interest rate if your guarantor has a good credit rating, but both you and the guarantor will have to undergo affordability and credit checks, so this type of loan may take longer to arrange.
Buy Now Pay Later
An interest-free, point-of-purchase credit option available from most online retailers. This is ideal for spreading the cost of large purchases but less flexible than a personal £5,000 loan.
You may benefit from a 0% interest rate for a set period; however, if you fall behind on payments, you'll be left with penalties.
If you want to borrow £5,000 to buy a car, you could consider 0% car finance. There's three main borrowing options for financing a car:
- Hire Purchase (HP)
- Personal Contract Purchase (PCP)
- Personal Contract Hire (PCH)
You'll need a good to excellent credit rating to get approval for this type of finance.
£5,000 loan FAQs
Yes, it's possible, but be prepared to pay a high interest rate. Your loan could be expensive, and you won't automatically get the amount you want to borrow.
Traditional banks view people with bad credit as high-risk and unreliable borrowers so it's unlikely you'll get a £5k loan bad credit from them. However, there are specialist brokers and direct lenders who’ll consider your application for a £5,000 loan.
No, if you fit the lender's eligibility criteria and have a decent credit score to show you are a reliable borrower, you won't need a guarantor for a £5,000 loan.
It depends on the terms and conditions of the loan. Some £5,000 pound loans may advertise a low APR, but you may be charged a fee for things like early repayment and late or missed payments.
If you plan to pay off your loan early or want control over when you repay, look for a £5k personal loan with flexible repayment terms.
The quicker you can repay the loan, the less interest you'll owe on the loan overall so check the terms and conditions carefully to make sure you won't face costly fees if you pay off your loan early.