Compare £5,000 Unsecured Loans

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What our Nerds say about 5,000 unsecured loans

An unsecured loan, also known as a personal loan, is a way to borrow money. You pay the amount borrowed back, with interest and any fees, in monthly instalments. Unlike with a secured loan, you do not need to put up a high-value asset such as your house as security.

You can use a personal loan for a variety of reasons, from holidays to DIY projects to debt consolidation.

Kristina Fox Writer at NerdWallet

Our guide to £5,000 loans

We look at what an unsecured loan is, eligibility requirements and how to apply in our guide to £5,000 loans.

If you’re ready to compare, you can look at some available options by browsing our comparison table.

What is an unsecured £5,000 loan?

An unsecured loan is a loan you can take out and pay back to a lender in monthly instalments. You pay back the amount you originally borrowed, plus interest, as well as any fees.

‘Unsecured’ means that you do not have to put an asset that you own up as ‘collateral’ for the loan, such as your house.

The rate of interest is usually fixed when you take out a personal loan, which means you would repay the amount you owe and interest accrued at a set amount each month throughout the loan term until you have cleared your debts.

Am I eligible for a £5,000 loan?

If you want to get a £5,000 loan, you should check whether you’re eligible before applying. You will usually have to:

  • be at least 18 or 21 years old
  • live permanently in the UK
  • prove your identity and address (using a document such as your passport, driving licence or recent utility bill)
  • have a regular income from employment or self-employment (minimum income limits may apply)
  • have a UK bank account
  • have a good credit history with no active county court judgments (CCJs) or evidence of bankruptcy

This is not an exhaustive list. Eligibility criteria may vary between lenders, so you should check with individual providers.

» MORE: Am I eligible for a personal loan?

What can I use a £5,000 loan for?

You can use a £5,000 loan to pay for once-in-a-lifetime events or high-value items, including the following:

  • Car: If you need a new car to commute to work you could use a £5,000 loan to pay for a vehicle.
  • Debt consolidation: You could use a £5,000 loan to consolidate your debts, putting them all under one loan so you have one payment per month and one fixed interest rate.
  • Home improvements: If working from home is your new normal, an unsecured loan could help to pay for redecorating the spare bedroom to create more workspace..
  • Holidays: If you’re approved for a £5,000 unsecured loan, you could use it to pay for a holiday.
  • Wedding: You’ve budgeted for your big day, so you know how much it could all cost. A personal loan could pay towards the wedding venue, the cake, bridalwear and the DJ.

You may not be able to use a loan for purposes such as:

  • house deposits
  • rent payments
  • household bills
  • gambling
  • investments
  • business use & County court judgement (CCJ) repayments

Whatever you plan to spend the money on, you should work out how much everything is likely to cost before considering a loan so that you only borrow the smallest amount you need and reduce the amount of interest you’ll pay.

Is a £5,000 loan right for me?

A £5,000 unsecured personal loan could be right for you if you want to borrow money to fund a project, and if you are confident that you can make the monthly repayments.

But bear in mind that there are other ways to borrow money apart from an unsecured loan, including:

One of these options may be more suitable for your circumstances. It’s worth comparing the different types of borrowing available to you to find the one that best matches your needs.

How much does a £5,000 loan cost?

The cost to borrow money using an unsecured loan can vary depending on the interest rate you are offered by the lender, as well as the repayment term you choose. You will also have to factor in any extra fees a provider may charge.

The table below shows some examples of how changing the repayment term and annual percentage rate, or APR, of a loan can affect how much you have to repay.

For example, a longer term can reduce the size of your monthly payments, but you will generally end up paying back more overall.

Loan amount APR Repayment term Monthly repayments Total fees/interest payable Total amount payable
£5,000 3.4% 2 years £215.79 £179 £5,179
£5,000 3.4% 5 years £90.73 £444.10 £5,444.10
£5,000 5% 2 years £219.36 £264.57 £5,264.57
£5,000 5% 5 years £94.36 £661.37 £5,661.37

Source: NerdWallet personal loan calculator

Our personal loan calculator can help you get an idea of how much a loan may cost you before you apply. However, it is an illustrative guide only, and for more information you should check your eligibility and get quotes with a lender or broker before formally applying for a loan.

Interest rate

The interest rate of a loan determines how much you will pay to borrow from a lender. The higher the interest rate, the more you will have to pay to borrow (though it also depends on the length of time you borrow the money for).

Charges

Lenders may charge other fees throughout the term of your loan. These can include acceptance fees, early repayment charges, or penalties for missed payments.

APR

The annual percentage rate, or APR, of a loan can give you an idea of how much it can cost you to borrow a certain amount of money over the course of a year. It includes the interest on the loan, plus any standard charges that may apply.

The ‘representative APR’ is the rate that will be offered to the ‘majority’ of customers. This means that at least 51% of customers who take out a loan will be given this rate, or lower. However, it’s worth bearing in mind that 49% of customers could be offered a higher interest rate on an unsecured loan.

You can use APR to compare the potential cost of loans from different lenders, though you should not treat it as a guarantee that you will be offered a loan at the advertised rate.

How long can I take to repay a £5,000 loan?

When you apply for a personal loan, you can choose a term over which to pay the money back to the lender. For a £5,000 loan, this is generally from one to five years.

However, some providers may offer shorter or longer term lengths, so it’s important to compare lenders to find a repayment term that best suits your circumstances.

Can I get a £5,000 loan with bad credit?

It is possible to get a personal loan with a bad credit history. However, you may be more restricted with what you can get and you may be offered higher interest rates than borrowers with better credit scores.

Some lenders offer loans aimed specifically at people with bad credit. Or you may want to consider another type of loan, such as a secured loan or a guarantor loan.

You should only apply for loans you think you’re likely to be accepted for, as each application will trigger a hard credit search, which is recorded on your file.

Multiple applications in a short space of time can suggest to lenders that you are desperate for funds, and can therefore decrease your chances of getting a loan. This applies to all potential borrowers, not just those with bad credit history.

» COMPARE: Loans for bad credit

What happens if I miss repayments on a £5,000 loan?

Missing repayments on an unsecured loan may affect your credit score and your ability to get credit in future.

This is because missed repayments stay on your credit file for six years. Lenders can see that you have missed a payment in the past, and they may think you would struggle to pay back a new debt.

You may also have to pay a late repayment charge. You could face legal action if you regularly fail to pay back your loan.

If you have missed a repayment, you can contact the lender and ask whether it is possible to have more time to pay. The lender may be able to set up a repayment plan, or stop charging further interest on your late payments.

You may also consider contacting a debt charity, such as Step Change, if you are worried about coping with your debt.

» MORE: What happens if I can't make a loan repayment?

What other types of loans are there?

If you’re not sure that an unsecured personal loan is the right choice for you, you may want to consider other options, such as a secured loan or guarantor loan.

Secured loans

A secured loan is a loan where you put up an asset (such as your home) as ‘security’ against the amount of money you’ve borrowed.

As with an unsecured loan, you make monthly repayments to pay off the loan, plus interest and fees. The term of the loan is set when you apply.

However, if you fail to make these repayments on time, the lender can sell your asset to repay the loan, any interest and fees.

» MORE: What is a secured loan?

Guarantor loans

A guarantor loan is a loan where repayments are backed up by a named guarantor – a close family member or friend, for example. This means that if the borrower defaults on a payment, their guarantor must make the repayment on their behalf.

You may be able to get a guarantor loan if you have bad or little credit history. If you repay the loan on time, you might be able to improve your credit score.

» MORE: Who can be my guarantor for a loan?

How to apply for a £5,000 loan

To apply for an unsecured loan, you will need to provide some personal details to the lender, including:

  • how much you want to borrow
  • how long you want to borrow it for
  • proof of identity and address
  • contact details
  • your employment status
  • your UK bank account details

The lender will then conduct a hard credit check on you, which will appear on your credit file. Providers may give you an instant decision. If you’re accepted, you could receive the money directly into your bank account on the same day, although with some lenders it may take a few working days.

£5,000 Unsecured Loans FAQs

Will my credit score be affected if I am rejected for a loan?

Rejection for credit does not automatically affect your credit score. However, too many hard credit checks (successful or not) in a short period of time may affect you getting credit in the near future, as these checks are visible to other lenders.

What’s more, some lenders may not accept you if you’ve recently been rejected for a loan.

How easy is it to get a £5,000 loan?

Whether you will be accepted for a £5,000 loan depends on your personal circumstances, including your credit history and your income. You can check your loan eligibility without affecting your credit score by going to NerdWallet’s eligibility calculator and comparison page.

Some examples

Here are some examples from UK loan providers that you can compare using the Monevo eligibility service:

    Shawbrook Personal Loan logo

    Shawbrook Personal Loan

    • Representative APR
      14.7% APR
    • Available Amounts
      £1,000 to £35,000
    • Min / Max Terms
      1 to 7 years
    Representative Example: Representative APR 14.7% (fixed). Based on a loan of £10,000 over 60 months at an interest of 14.7% p.a. (fixed). Monthly repayments of £231.62. Total amount payable £13,896.65. Maximum APR: 29.9%.
    More info
    • Broker
    Post Office Money Personal Loan logo

    Post Office Money Personal Loan

    • Representative APR
      14.9% APR
    • Available Amounts
      £1,000 to £25,000
    • Min / Max Terms
      1 to 7 years
    Representative Example: Representative APR 14.9%. Based on a loan of £4,000 over 36 months at an interest rate of 14.9% p.a. (fixed). Monthly repayments of £136.65. Total amount payable £4,919.47. Maximum APR: 29.9%.
    More info
    Admiral Personal Loan logo

    Admiral Personal Loan

    • Representative APR
      14.9% APR
    • Available Amounts
      £1,000 to £30,000
    • Min / Max Terms
      1 to 8 years
    Representative Example: Representative APR 14.9%. Based on a loan of £10,000 over 60 months at an interest of 13.97% p.a. (fixed). Monthly repayments of £232.53. Total amount repayable before £13,951.80. Maximum APR: 39.9%.
    More info
    • Peer To Peer
    Zopa Personal Loan logo

    Zopa Personal Loan

    • Representative APR
      19.9% APR
    • Available Amounts
      £1,000 to £25,000
    • Min / Max Terms
      1 to 5 years
    Representative Example: Representative APR 19.9%. Based on a loan of £10,000 over 60 months at an interest of 19.9% p.a. (fixed). Monthly repayments of £255.50. Total amount payable £15,329.80. Maximum APR: 34.9%.
    More info
    Oakbrook Personal Loan logo

    Oakbrook Personal Loan

    • Representative APR
      19.9% APR
    • Available Amounts
      £1,000 to £10,000
    • Min / Max Terms
      1 to 5 years
    Representative Example: Representative APR 19.9%. Based on a loan of £5,000 over 48 months at an interest of 19.9% p.a. (fixed). Monthly repayments of £147.71. Total amount payable £7,090.08. Maximum APR: 34.9%.
    More info
    My Community Finance Personal Loan logo

    My Community Finance Personal Loan

    • Representative APR
      23.0% APR
    • Available Amounts
      £1,500 to £25,000
    • Min / Max Terms
      1 to 5 years
    Representative Example: Representative APR 23.0% (fixed). Based on a loan of £4,500 over 48 months at an interest of 23.0% p.a. (fixed). Monthly repayments of £139.66. Total amount payable £6,703.57. Maximum APR: 23.0%.
    More info
    Abound Personal Loans logo

    Abound Personal Loans

    • Representative APR
      24.8% APR
    • Available Amounts
      £1,000 to £10,000
    • Min / Max Terms
      1 to 3 years
    Representative Example: Representative APR 24.8%. Based on a loan of £2,000 over 36 months at an interest of 24.8% p.a. (fixed). Monthly repayments of £76.75. Total amount payable £2,763.00. Maximum APR: 24.8%.
    More info
    BetterBorrow Personal Loan logo

    BetterBorrow Personal Loan

    • Representative APR
      27.3% APR
    • Available Amounts
      £1,000 to £12,000
    • Min / Max Terms
      1 to 5 years
    Representative Example: Representative APR 27.3%. Based on a loan of £5,000 over 42 months at an interest of 27.3% p.a. (fixed). Monthly repayments of £178.12. Total amount payable £7,480.93. Maximum APR: 39.8%.
    More info
    KOYO Personal Loan logo

    KOYO Personal Loan

    • Representative APR
      29.9% APR
    • Available Amounts
      £1,500 to £12,000
    • Min / Max Terms
      6 months to 5 years
    Representative Example: Representative APR 29.9%. Based on a loan of £6,000 over 48 months at an interest of 26.45% p.a. (fixed). 47 scheduled monthly payments of £205.09 and a final payment of £204.75. Total amount payable £9,843.98. Maximum APR: 34.9%.
    More info
    Finio Personal Loan logo

    Finio Personal Loan

    • Representative APR
      39.9% APR
    • Available Amounts
      £1,000 to £10,000
    • Min / Max Terms
      1 to 5 years
    Representative Example: Representative APR 39.9%. Based on a loan of £2,000 over 24 months at an interest of 39.9% p.a. (fixed). Monthly repayments of £116.07. Total amount payable £2,785.68. Maximum APR: 69.9%.
    More info
    Lifestyle Personal Loan logo

    Lifestyle Personal Loan

    • Representative APR
      49.9% APR
    • Available Amounts
      £1,000 to £5,000
    • Min / Max Terms
      1 to 5 years
    Representative Example: Representative APR 49.9%. Based on a loan of £3,000 over 36 months at an interest of 49.9% p.a. (fixed). Monthly repayments of £146.37. Total amount payable £5,269.32. Maximum APR: 49.9%.
    More info
    118 118 Personal Loan logo

    118 118 Personal Loan

    • Representative APR
      49.9% APR
    • Available Amounts
      £1,000 to £5,000
    • Min / Max Terms
      1 to 3 years
    Representative Example: Representative APR 49.9%. Based on a loan of £2,000 over 24 months at an interest of 41.2% pa (fixed). Monthly repayments of £123.64. Total amount payable £2,967.43. Maximum APR: 79.9%.
    More info
    Bamboo Personal Loan logo

    Bamboo Personal Loan

    • Representative APR
      59.7% APR
    • Available Amounts
      £1,000 to £8,000
    • Min / Max Terms
      1 to 5 years
    Representative Example: Representative APR 59.7% (fixed). Based on a loan of £3,000 over 30 months at an interest of 47.73% p.a. (fixed). 29 Monthly repayments of £173.02 and a final payment of £172.92. Total amount payable £5,190.50. Maximum APR: 69.9%.
    More info
    Everyday Loans Personal Loan logo

    Everyday Loans Personal Loan

    • Representative APR
      99.9% APR
    • Available Amounts
      £1,000 to £15,000
    • Min / Max Terms
      1 to 5 years
    Representative Example: Representative APR 99.9% (fixed). Based on a loan of £3,000 over 24 months at an interest of 71.3% p.a. (fixed). Monthly repayments of £237.75. Total amount payable £5,706. Maximum APR: 299.8%.
    More info

If you are thinking of consolidating existing borrowing you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.

Our service is free of charge but we receive commissions from the providers we refer you to. This table is initially ordered by representative APR. You can use the options above the table to order it according to various criteria. You may be offered different rates depending on your personal credit rating.

Our comparison service features a selection of providers from whom we receive commission.

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