Compare £4,000 loans from multiple brands.
- Check out all the different loan options before making any decisions
- 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 your income won’t cover it, a £4,000 loan could help pay for necessary purchases , whether it’s a kitchen upgrade or a new car.
Taking out a loan shouldn’t be entered into lightly, though.
You need to be sure that you can afford the repayments or you risk being charged fees and damaging your credit score, which can impact your ability to borrow in the future.
How much will a £4,000 loan cost?
Whenever you take out a loan, you’ll always repay more than you initially borrowed.
The total amount you pay back will depend on the rate of interest charged by the lender and the term (length) of the loan.
Most personal loans have a fixed interest rate, rather than a variable rate. This means your monthly payments will stay the same over the life of the loan.
Our loan calculator can help you see the monthly cost, as well as how much you’ll pay overall.
Would a secured or an unsecured loan work better for a £4,000 loan?
That depends on your circumstances.
Secured loans require you to offer up an asset, like your home, as security.
This means the lender has a way of getting back their money if you stopped making your payments.
If you fail to repay, the lender can sell the property (or other valuable asset) to recover the money they’re owed.
Most personal loans are unsecured loans. Lenders will look at your financial history, income and credit score to decide if they’ll approve your application.
Interest rates on unsecured loans can be higher than those on secured loans, but this isn’t always the case. Regardless of which type of loan you choose, you’ll usually receive a higher interest rate if you have a lower credit score or income.
Is there an alternative to a £4,000 loan?
You may want to think about:
0% purchase credit card
Some credit cards offer 0% interest on purchases for a set period.
If you can get accepted for one with a higher credit limit, you could use it to borrow without having to pay interest. When the promotional period ends, the card’s standard interest rate will apply on any unpaid balance. So, it’s best to pay it back in full before this happens.
0% balance transfer card
If you want to use the loan to consolidate existing credit or store card debt, consider applying for a balance transfer card.
They tend to have lengthy 0% interest periods, which means that you can chip away at your debt easily. There will be a fee for moving your debt and you’ll need to repay the balance in full before the introductory offer ends.
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.
Loan from family or friends
It may be possible to receive a loan from your loved ones. It’s important to treat it like any other type though and create a loan agreement. This should detail the loan amount, expected monthly repayments, term and interest rate. That way, there can be no disagreements over the terms in the future.
Can I get a £4,000 loan with bad credit?
If you have a poor credit score, there are some lenders who will still consider you. They’ll look at your current financial situation to determine whether they think you can afford the repayments.
But, because you’re regarded as more of a risk, expect to be charged a higher rate of interest and to be offered a lower loan amount than someone with a good credit history.
Some companies that offer loans to people with bad credit charge exorbitant rates of interest, so avoid these. Always read the terms and conditions carefully.
However, consider carefully your own financial situation and if taking on more credit is the right solution for your current situation. Speak to debt advice organisations to get support on improving your situation before you consider taking out more debt. Available organisations include:
Am I eligible for a £4,000 loan?
Lenders will look at a few factors when considering your application for a £4,000 loan.
They’ll want to determine how likely it is that you’ll repay back all the money you borrow from them.
They’ll examine your credit score as part of their affordability check. With a high score, you’ll be regarded as financially reliable and less risky to lenders. Therefore, you’re more likely to be accepted for the loan and be offered the advertised APR. With a lower credit score, you might still get the loan, but at a higher interest rate.
They’ll also look at your income and outgoings to decide if they think you can afford to borrow £4,000.
How to apply for a £4,000 loan.
After you’ve done your research and used our loan calculator to see how much a £4,000 might cost you (including charges and fees), you can use our smart search tool to see which loans you may be eligible for.
Our smart search lets you find the right loan for you without affecting your credit record.
Can I get a £4,000 loan for a one-off purchase?
You can usually use your loan for whatever purpose you want, you’ll be asked what it’s for though. Using a loan to fund a house deposit or to lend to someone else can result in your application being rejected. Take a look at the terms and conditions of the loan to see if there are any exclusions on loan use.
Always ask yourself if you really need to take out a loan. If it’s not an absolute necessity, you’re better off trying to save up for it.
What to consider before choosing a loan.
Don’t apply for the first loan you come across. You should compare rates and fees to get the best deal for you.
Remember to take into account:
Annual percentage rate (APR)
The APR is the interest rate the lender charges you for borrowing the money, plus any additional fees over the course of a year. The APR makes it easy to compare the cost of loans like for like.
You should be able to comfortably afford these payments, even if you factor in an emergency cropping up that you have to shell out for.
Length of the loan
Aim to pay off the loan in the shortest amount of time you can afford. Although paying off your loan over a longer period can mean smaller monthly payments, the longer you take to repay your loan, the more interest you’ll have to pay overall.
Check for fees
Look out for administration fees called arrangement fees. Plus, early repayment, or early settlement charges. Some lenders will issue a charge if you pay off your loan early.
Frequently asked questions
A soft search is a check conducted on your credit file that won’t affect your credit score.
It can help you to see your eligibility for a loan before you actually apply for it.
Although a soft search is recorded on your credit file, lenders can’t see it, so it won’t affect their decision.
When you compare loans with us, you can use our smart search tool to perform a soft search. It returns a credit score, which is used to show you the loans that you have the greatest chance of being accepted for.
Generally speaking, you should pay back your loan as quickly as possible. Spreading repayments over a longer term might mean lower monthly repayments, but you’ll end up paying more in interest.
Of course, you need to feel confident you can afford the monthly repayments that come with shorter term loans though.
When the APR quoted for the loan is labelled as ‘representative’ you won’t necessarily be offered that rate.
The APR representative is the rate that at least 51% of applicants will be given, typically those people with the best credit rating.
The actual rate you’ll be offered (your personal APR) may be higher making the loan more expensive. It will depend on your personal circumstances and credit rating.
Some lenders might insist you have a guarantor if you have a poor credit rating or if you haven’t had the chance to build up your score yet.
Guarantor loans tend to have high interest rates and require trust between you and the guarantor that you won’t stop making your repayments.
Typically, it’s easier to get approved for a loan if you have a good credit rating. You’ll also have more choice and be offered lower interest rates.
You may still get approved for a loan with a lower credit score, especially if you have a regular salary that makes repayments affordable. But lenders will usually charge a higher interest rate to offset the risk.
In some cases, a lender will decline to offer credit at all if your score is too low.
Yes, you can settle your loan early but you may be charged a fee, often equivalent to one or two months’ interest. This is called an early repayment charge.
There may also be charges if you want to make overpayments, so check the terms and conditions carefully.
You may be charged a missed payment fee. Multiple missed payments will be noted on your credit file. This can lower your credit score and make it harder for you to get credit in the future.
If you think you’re at risk of missing a repayment, contact your lender to see if they can help take the pressure off. This could be by changing the repayment schedule to lower the payment amount or by granting you a repayment holiday. Be warned that you'll still be expected to pay interest on the amount where you haven't made repayments, making it more expensive overall.
You can use your loan in this way, but before committing to a debt consolidation loan you should review all your options to ensure that it’s the most cost-effective way to pay off your debts.
To make it worthwhile you should only use it to pay off debts with a higher interest rate than the loan.
Also, check if you need to pay early repayment charges on the debts you’re clearing with the loan, they might cancel out any savings you’d be making by consolidating the debts.