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£5,000 loan: the cheapest rates
You can check your eligibility and your credit score before applying for a loan to see which lenders are likely to approve your application.
According to the independent financial product research firm Defaqto, the best representative Annual Percentage Rate (APR) for a £5,000 unsecured personal loan is currently 7.2%, advertised by Santander and Tesco Bank. You have to be a Clubcard holder to get this rate from Tesco Bank.
The figures in our table below show the cheapest loans based on a representative example of £5,000 repaid over three years. We’ve listed the loans by APR, from lowest to highest. Where lenders offer the same representative APR, we’ve ordered the loans based on our star rating.
Provider | Representative APR | Estimated monthly repayments | Estimated total payable | NerdWallet’s Rating | |
|---|---|---|---|---|---|
 | 7.2%* | £154.32 | £5,555.52 | 5.0 / 5 | |
| | 7.2% | £154.32 | £5,555.52 | 4.5 / 5 | |
 | 7.4% | £154.75 | £5,571.00 | 3.5 / 5 | |
 | 7.4% | £154.79 | £5,572.17 | 3.5 / 5 | |
 | 7.8% | £155.62 | £5,602.32 | 3.5 / 5 | |
 | 9.9% | £160.11 | £5,763.96 | 3.5 / 5 | |
 | 9.9% | £160.11 | £5,763.96 | 3.5 / 5 | |
 | 10.2% | £160.75 | £5,787.00 | 4.0 / 5 | |
 | 11.9% | £164.40 | £5,918.40 | 5.0 / 5 | |
 | 14.9% | £170.82 | £6,149.35 | 4.0 / 5 |
* Clubcard members receive a preferential rate – the representative APR for non-members is 7.9% for the same amount and term.
Important information: APR is checked weekly based on data about 41 providers from the independent financial information service Defaqto. For the table above, we haven’t included products with limited availability, for example, they are only available to existing customers or limited solely to homeowners. We aim to provide accurate information but prices, terms and conditions of products and offers can change, so double-check first. Our Star Ratings do not consider the product provider’s lending rates and therefore do not reflect how much it costs to borrow from the reviewed brand. Loan rates can be dependent on your personal circumstances and specific loan requirements. Representative examples are based on information from the lender and are not necessarily based on the same loan amount or loan term.
What to consider when choosing a £5,000 loan
Annual Percentage Rate (APR)
The APR represents the yearly cost of borrowing money, taking into account the interest rate and any standard fees. Lenders are required to show you a representative APR to help you compare deals, which is the rate that they expect at least 51% of applicants will receive. Your personal APR could be the same as this rate, but it may also be higher or lower.
The best rates for a £5,000 loan will be available to people with a good credit history. Lenders usually look at several factors when deciding whether to accept your application, such as your credit history and financial situation, which also influence the rate you receive. Your rate also depends on how much you want to borrow and the loan term you choose.
The cost of the loan
It’s important to make sure you can afford the monthly repayments and that you’re comfortable with the total cost of the loan.
Shorter loan terms make the loan less expensive, but your monthly repayments will be higher. Longer loan terms reduce your monthly repayments, but you’ll pay more interest overall.
Your credit history
Checking your credit score helps you to be confident about applying for a loan. Your credit score illustrates how the lender may view your application:
- a good credit score means it’s more likely that your application will be accepted and that you’ll receive a good interest rate
- a bad credit score indicates that your options for borrowing are more limited and that credit will be more costly for you – your application could be rejected altogether
If you have a bad credit score and don’t need the money right now, you might choose to improve it before applying for a loan.
Improving your score can unlock more options for borrowing £5,000 and make the loan a lot cheaper for you. You’ll need to give yourself six months to a year to build a record of making repayments on time.
NerdWallet’s star rating
When comparing loans, features like the ease and speed of the application process and the flexibility you’ll have around making repayments may influence your choice.
For example, can you pick a monthly repayment date that suits you? And if you think you’ll be able to settle the loan earlier than planned, will the lender charge any fees?
NerdWallet’s star ratings take product features like these into account. We review the personal loans market each month, evaluating and rating loans from the UK’s lenders based on 20 of the features that customers have told us are most important.
This information is gathered from each lender’s website, company representatives and the independent financial product analyst Defaqto. In addition, we regularly add new brands and our editorial team reviews them against the same criteria for consistency and accuracy.
Our star ratings are based on this data across all products and features and presented on a scale of one to five stars, where a one-star score represents ‘poor’ and a five-star score represents ‘excellent’.
Read more about our review methodology and what we mean by ‘best’.
» MORE: Compare the best personal loans
Taking a £5,000 loan over different loan terms
The lender will ask you to choose a repayment period when you apply for a £5,000 loan. Many lenders allow you to pick a term between one and five years, although some may offer longer terms.
The quicker you can pay off a loan the less it will cost overall. However, your monthly repayments will be lower if you pay the loan back over a longer period.
The table below shows the monthly repayments and total repaid over different terms for a £5,000 loan, taken at an APR of 9.9%. It’s for illustrative purposes only.
| £5,000 taken over | Monthly repayments | Total repaid | Interest paid |
|---|---|---|---|
| One year | £438.36 | £5,260.38 | £260.38 |
| Two years | £229.52 | £5,508.49 | £508.49 |
| Five years | £104.95 | £6,297.23 | £1,297.23 |
You can use our personal loans calculator to see how much your loan repayments could be over different loan terms and interest rates.
Sam Bromley, Lead Writer and Loans Expert at NerdWallet
What Our Nerds Say
It’s important that you can afford the monthly repayments. Before applying for a loan, complete a budget to see how much you can comfortably pay back each month. You should factor in regular payments while leaving room for costs that you can’t foresee, such as an emergency car repair.
Can you get bad credit loans of £5,000?
It’s possible to get a £5,000 loan if you have a bad credit history, but you may need to apply with a specialist lender that accepts people with a poorer credit file.
Bad credit lenders charge high interest rates to account for the increased risk of lending to people with a poor credit history, and the maximum loan amount is usually lower too.
The best rates for a £5,000 bad credit loan
The best representative APR for a £5,000 bad credit loan is currently 25.8%, according to Defaqto. This rate is advertised by Abound.
The figures in the table below show bad credit lenders that offer loans of £5,000, based on a representative example of £5,000 repaid over three years. We’ve ordered the loans by the lowest rates, unless two or more lenders advertise the same APR, in which case we’ve ordered them by our star rating.
What is a representative example?
To show you how much it costs to borrow a particular amount over a specific period, lenders must display a representative example. This shows:
- An example loan amount, such as £5,000.
- An example loan term, such as 36 months.
- The annual interest rate and whether it’s fixed or variable.
- A monthly repayment amount and the total repayable over the loan term.
Provider | Representative APR | Estimated monthly repayments | Estimated total payable | NerdWallet’s Rating | |
|---|---|---|---|---|---|
 | 25.8% | £194.00 | £6,984.00 | 4.0 / 5 | |
 | 32.5% | £219.16 | £7,889.83 | 4.0 / 5 | |
 | 37.9% | £219.36 | £7,896.96 | 3.0 / 5 | |
 | 39.9% | £223.58 | £8,048.88 | 2.5 / 5 | |
 | 49.7% | £243.48 | £8,765.18 | 3.5 / 5 | |
 | 49.9% | £243.98 | £8,783.19 | 3.0 / 5 |
Late repayments can cause you serious money problems. Consolidating multiple debts into one loan can extend the term of your borrowing and increase your cost of borrowing.
Important information: APR is checked weekly, and data is supplied by the independent financial information service Defaqto. We aim to provide accurate information but prices, terms and conditions of products and offers can change, so double-check first. Our Star Ratings do not consider the product provider’s lending rates and therefore do not reflect how much it costs to borrow from the reviewed brand. Loan rates can be dependent on your personal circumstances and specific loan requirements.
» MORE: Compare the best bad credit loans
Your eligibility for a £5,000 loan
Eligibility criteria vary across lenders, but to be eligible for a £5,000 loan you’ll often need to:
- be at least 18
- be a UK resident
- have a regular income
- have a good credit history
Most lenders display eligibility criteria on their websites.
» MORE: How to get a loan
How to check your eligibility for a £5,000 loan
It’s a good idea to check your eligibility before applying for a £5,000 loan – many lenders let you do this on their website.
You usually need to enter details such as your employment status and financial situation. Then the lender carries out a ‘soft’ credit check to work out the likelihood of your application being accepted. Soft searches don’t affect your credit history and only you can see them on your credit report.
The lender may also give you an idea of the interest rate you’re likely to receive, but this won’t be set in stone. The final rate and decision will always come when you apply for the loan properly.
Alternatively, you can use a loan eligibility service, which shows you the loans you’re likely to qualify for based on your financial circumstances and your credit history. Just make sure that the service only carries out a soft credit check.
When you apply for a loan, the lender usually carries out a ‘hard’ search of your credit history. This is a full check that shows on your credit report when a firm asks to see your data. Too many hard searches over a short time can damage your credit file because it suggests that you’re relying on credit. This is why it’s important to feel confident about the likelihood of receiving a loan before applying.
Checking your credit score before applying
If you have a poorer or more limited credit history, you might still be eligible for a £5,000 loan from a specialist bad credit lender. But you’ll have fewer options than someone with a good credit history and bad credit loans are a lot more expensive than regular loans.
If you have a bad credit score and don’t need the money right now, you might choose to improve it before applying for a loan.
Improving your score can unlock more options for borrowing £5,000 and make the loan a lot cheaper for you. You’ll need to give yourself six months to a year to build a record of making repayments on time.
What can a £5,000 loan pay for?
The lender will usually ask why you want to borrow £5,000. Common reasons for borrowing this amount of money include:
- debt consolidation
- buying a car
- home improvements
- going on holiday
- paying for a wedding
- paying for education
While these are common reasons for taking out a personal loan, you can borrow for almost anything. However there are some restrictions – for example, you can’t take out a personal loan for business purposes, investing or a house deposit.
You shouldn’t borrow more than you need, because it could leave you financially stretched. If your overall expenditure increases in the future, you could then struggle to meet your loan repayments – and missed payments will damage your credit file.
Different types of £5,000 loan
Beyond regular personal loans and bad credit loans, there are different £5,000 loans that you could apply for. These include:
If you have a less than perfect credit score, these loans can be easier to get than normal loans.
But while each of these loans has advantages, there are significant disadvantages that you should be aware of. For example, if you fall behind with your repayments on a secured loan, there’s a risk that you could lose your property.
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