£20,000 loans

Compare loans for £20,000 [1]


  • Check out all the different loan options before making a decision
  • Make sure the monthly repayments are realistic for your budget
  • Use smart search to see how likely you are to be accepted before applying

If you need a large cash injection to get an extension on your home or buy a new car, you may think about taking out a personal loan, but is it the right option for you?

Here’s everything you need to know…

How much will a £20,000 loan cost?

There’s no set cost for a loan, the overall amount to be paid will depend on the interest rate and the length of the loan term.

Your interest rate will be calculated using information from your application, including your annual income and credit score. It also will depend on whether you’ve chosen a fixed or variable rate loan. A fixed rate will result in your repayments staying the same over the term, whereas a variable rate can go up or down usually in line with the Bank of England base rate.

If you’re viewed to be at a higher risk of falling behind on your payments, you’ll likely be offered a higher interest rate. This could be because you have a history of defaulting on payments or you don’t have a steady income.

A longer loan term may result in lower monthly payments, but the total amount you repay will be more.

Generally, it’s a good idea to borrow the smallest amount (that still covers your requirements) over the shortest time possible. This will help to keep the costs down.

£20000 loans

Unsecured personal loan for £20,000

An unsecured loan is when the lender doesn’t require collateral, like your house, as security.

This usually means that they’re stricter with the eligibility criteria, especially on larger amounts. You’ll need to demonstrate that you can comfortably afford the monthly repayments and that you have a history of being able to borrow and pay off debt responsibly.

The loan agreement will detail the terms and conditions, like the term, monthly repayment amount and interest.

Alternatives

Your options will be limited for borrowing such a large amount.

If a personal loan isn’t available to you, investigate whether a secured loan or remortgaging could be the right choice for your circumstances.

Secured loan

Typically your home is used as security for the loan, which means that if you fail to repay the amount borrowed, it could be repossessed and sold to pay back the lender. You may also be able to find loans that use your car or jewellery as collateral.

A secured loan may offer lower interest rates and longer loan terms than unsecured options, but you will end up paying a lot more overall.

Always consider whether using your home as collateral is the right option for you before committing to the loan. 

Remortgaging

It’s possible to remortgage your home to release equity, and therefore money. This is an option often used if you want to fund home improvements but don’t have enough disposable income to cover it.

It will usually require you to have a significant amount of equity in the property before you’ll be considered. As a mortgage is essentially a secured loan, your home is at risk if you fail to make your repayments.

Before taking out a loan, whether it’s secured or unsecured, think about all the options available.

Perhaps you could raise a significant amount of cash by creating a budget and sticking to it over a few years. You may also be able to couple this with a 0% purchase credit card and a loan from your family.

This won’t provide you with a quick cash injection, but it’s a safer option where your home isn’t at risk. Always remember to draw up a loan agreement even if it’s from your family, though. Detail the monthly repayments, loan term and interest rate to avoid arguments in the future.

Can I get a £20,000 loan with bad credit?

Finding a large loan if you have a bad credit will be difficult, but it may not be impossible.

There are specialist lenders that could be willing to help, but consider whether it’s a good idea to borrow that amount in the first place. You could find yourself in a dire situation if you’re unable to make the repayments and bad credit loans tend to have high interest rates.

If you’ve decided that you definitely need a loan, think about applying for a smaller amount, paying it off on time to improve your credit score and applying for a larger loan in the future, if needed.

Am I eligible for a £20,000 loan?

Again, this will depend on factors like your employment status, income and credit score.

For a loan this big, the lender will need enough evidence that you’ll be reliable with making repayments and they’ll receive their money back (plus interest), within the agreed timeframe.

The eligibility criteria will differ slightly between lenders, but you can expect to need a steady income over a certain threshold and a good credit score to be considered.

Always use our smart search tool to compare loans. It will show you which ones you’re more likely to be accepted for without affecting your credit score. This can help prevent failed applications from credit impacting your credit report.

How to apply for a £20,000 loan?

All you need to do is:

  1. Let us know what type of loan you require, how much you want to borrow and for how long

  2. Tell us some details about yourself, including your employment status and annual income

  3. We’ll use our smart search to tell you which loans you have a higher chance of being accepted for

  4. Compare the loans available to find the right one for you, then click ‘Apply’

What to consider before taking out a loan?

Before taking out a loan, especially a large one, it’s vital that you think through the decision carefully.

Consider what would happen if you lost your job, or expensive bills ate up a huge chunk of your monthly income. As the cost of living is skyrocketing, and household expenses are on the increase, it can be tempting to start borrowing to uphold your current lifestyle, but debt can force you into a vicious cycle.

If you’re struggling, speak to a free adviser at StepChange or the National Debtline, who can help you assess your options and come up with a plan to manage your debt.

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