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Looking to compare £2,000 loans?
Taking out a loan is a big commitment, so before you borrow £2,000 it’s worth finding out how much it’ll cost to see if you can afford it.
How much your loan costs will depend on:
Yes, an unsecured loan, also known as a personal loan, can be one of the cheapest ways to borrow money for expensive purchases or things like paying for home improvements.
They’re usually offered to people with a good credit rating and the loans don’t need to be secured against your home.
You can typically choose to repay a personal loan over a period of between one to 10 years.
Other types of loan you could consider if you want to borrow £2,000 include:
With this type of loan the lender uses an asset, like your home, as security. This can be repossessed if you’re unable to pay the money back. If you’ve got poor credit history, you’re more likely to be accepted for a secured loan than an unsecured one
If you’ve got a poor credit score you could use a guarantor loan to borrow £2,000. With this type of loan, a family member or close friend acts as a guarantor and agrees to be responsible for paying off the debt if you can’t keep up with repayments
Another option for borrowing £2,000 is to use a 0% purchase credit card, particularly if you’re buying something specific, like a boiler for your home. If you pay the money back during the introductory interest-free period, it won’t cost you anything extra
If you can hold off and save up to make your purchase, seriously think about it. You’ll have nothing to repay and no risk of debt spiralling out of control. Try drawing up a budget to see where you can cut back each month and move the money out of your current account to eliminate temptation.
Yes, depending on your situation there might still be several options available. As well as secured loans and guarantor loans, you could also try:
Bad credit loans – Some lenders specialise in loans for people with a poor or limited credit history. The interest rates and admin fees for these loans are likely to be higher, but making your repayments in full and on time can help to improve your credit score
Credit union loan – If you’re struggling to find a £2,000 loan because of your bad credit rating, and you want to avoid the high costs of payday loan companies, a not-for-profit credit union loan could be a good option. You can find your nearest credit union here
Debt consolidation loans – If you’re wanting to pay off existing debts, you could try a debt consolidation loan. This will help streamline your debts by combining them into one new loan with monthly repayments going to a single lender at a lower interest rate
However, consider carefully your own financial situation and if taking on more credit is the right solution for your current situation. Speak to a debt advice organisations to get support on improving your situation before you consider taking out more debt. Available organisations include:
This will depend on the type of loan you want to take out and the lender. The eligibility criteria will vary, but lenders will usually look at:
There are several ways you can apply, including online, on the phone, by post or in your local bank branch.
Before you apply it’s a good idea to use a smart search eligibility checker to find out which loans you’re most likely to be accepted for.
This does a soft check on your credit report without having an impact on your credit score. Remember that multiple rejected applications can negatively affect your credit report.
Yes, a personal loan can be a good way to spread the cost of an expensive purchase that you might otherwise be unable to afford.
You can typically get personal loans up to a maximum amount of around £25,000.
Working out what type of credit will best suit your needs and situation will help prevent you from paying more than you need to.
For one-off purchases, the options you could consider for borrowing £2,000 include using a personal loan, 0% credit card or a finance deal from the retailer - just make sure you compare rates and conditions beforehand to help you get the best deal.
There are several things you should consider before you decide to take out a loan. For example, you should think about:
Ask yourself what the loan is for and whether you really need it. Depending on what you plan to use the money on, there are lots of different types of loan and credit available for different purposes
Always look at the APR and the total amount you’ll have to repay for a loan. Try to choose the shortest repayment period (that’s still affordable) with the lowest APR
Make sure you understand the difference between the two. A secured loan is usually easier to be approved for and might offer better rates, but it could mean you lose your home if you don’t keep up with repayments
The length of term you choose will influence how much you repay each month. Longer terms usually come with lower interest rates, but you may end up paying more overall
Look closely at what you’ll need to repay each month and for how long. Work out your budget beforehand to make sure you can afford the repayments comfortably
Personal loans can come with additional fees. Make sure you’re aware of these and any charges you might need to pay, like late payment fees, as part of the terms and conditions. That way you can avoid unexpected costs later on
Your credit report can affect which options are available to you, so it’s a good idea to check it before you apply. Make sure the information is up to date and correct any mistakes to help improve your credit score
A soft search, also known as a smart search, is a kind of light touch credit check. It makes a check on your credit file without affecting your credit score.
When you apply for a loan or credit card, lenders will do a hard search on your credit report.
Too many applications in a short space of time can leave a footprint on your credit report and make it look like you’re struggling financially. This can negatively affect your credit score.
Using a soft search like our smart search tool will show you which loans you’re most likely to be accepted for before you apply.
No, most loans won’t ask for a guarantor unless you take out a guarantor loan. Instead, the lender will use their eligibility criteria to decide whether they’ll lend to you.
You’ll have the best chances of being accepted and getting the best rates if you have a good credit score, a low-debt-to-income ratio (the amount of your income you’ll use to pay off the loan), as well as a stable income and employment.
Lenders vary in their eligibility criteria, but they all use information from credit reference agencies to help them assess your application.
Different credit reference agencies use different ranges to score your credit rating.
The three largest agencies, Equifax, Experian and TransUnion, mark your credit report out of 1000, 999 and 710 respectively.
As an example, a good score for Experian is considered to be above 881, while a fair score is between 721 and 880. A poor score is between 561 and 720, and a very poor credit score is considered to be one that’s under 560.
The higher your score, the more chance you have of being approved for a loan.
There are also several ways to improve your credit score which can help you access better rates and more options over time.
Yes, it’s possible to pay off your £2,000 loan in full before the end of the term, but bear in mind that some lenders will charge an early repayment fee for this.
This fee is often around one to two months’ worth of interest.
Yes, you should still be able to get a loan although you may have fewer options to choose from if you’re self-employed.
You’ll usually need to have a good credit record if you want to get a personal loan and should be able to show that you have a reliable income.
If you don’t have the credit record or income information needed, other options include taking out a secured loan or a guarantor loan. Both of these provide the lender with added security that the loan will be paid back if you’re unable to make your repayments.
You should get in touch with your lender as soon as possible - they may be able to offer some options that can help and they might not charge you a late payment fee.
If you do miss a repayment or are late in paying, you’re likely to be charged a late payment fee by your lender. This will be marked on your credit report and could negatively affect your credit rating.
Generally, missing three or more months of repayments is classed as defaulting on your loan. If this happens there’s a risk of court action being taken against you and potential for your home or car to be repossessed if you’ve got a secured loan.
If you’re struggling to pay off your debts, it’s best to get free independent debt advice, available from charities like NationalDebtline and StepChange, as soon as you can.
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