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.
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
- 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.