What is the best way to get a £10,000 Loan?

Thinking of taking out a £10000 loan? You might have noticed that there’s quite a wide range of funding options available to you. It can often be overwhelming sifting through different loans, trying to make sense of each option, and finding the loan that’s right for you.

Typically, the most popular loans amongst those taking out loans of £10,000 tend to be personal loans and homeowner loans.

How much does a £10000 loan cost

Loan Repayment Example

Loan Repayment Example

Let’s work through the example of a loan of £10,000 taken out over 5 years (60 months) with an annual APR of 6.1%. We’ll determine the monthly repayments, including both capital and interest.

Loan Details

  • Loan amount: £10,000
  • Annual Percentage Rate (APR): 6.1%
  • Loan term: 5 years (60 months)

Steps to Calculate Monthly Repayments

  1. Convert the annual interest rate to a monthly interest rate:

    \( r = \frac{6.1\%}{12 \times 100} = \frac{0.061}{12} \approx 0.00508 \)

  2. Determine the number of monthly payments:

    \( n = 5 \times 12 = 60 \)

  3. Plug the values into the formula:

    \( M = P \frac{r (1 + r)^n}{(1 + r)^n – 1} \)

    Where:

    • \( M \) is the monthly repayment
    • \( P \) is the loan principal (initial amount)
    • \( r \) is the monthly interest rate (annual rate divided by 12)
    • \( n \) is the number of payments (loan term in months)
  4. Calculate step-by-step:
    1. \( (1 + r)^n = (1 + 0.00508)^{60} \approx 1.34885 \)
    2. \( r (1 + r)^n = 0.00508 \times 1.34885 \approx 0.00685 \)
    3. \( (1 + r)^n – 1 = 1.34885 – 1 = 0.34885 \)
    4. \( M = 10000 \times \frac{0.00685}{0.34885} \approx 10000 \times 0.01962 \approx 196.20 \)

Monthly Repayment

The monthly repayment is approximately £196.20.

Summary

If you take out a loan of £10,000 over 5 years with an APR of 6.1%, your monthly repayment would be approximately £196.20. This amount includes both the repayment of the loan principal and the interest. Over the 5-year period, you will make a total of 60 payments.

Whether you qualify for a loan at this rate of interest will depend on your circumstances, but assuming you have an excellent credit score, then you should have every chance of qualifying for a UK market leading personal loan rate.

Can I Get a £10000 Loan?

A personal loan tends to be more straightforward than other forms of finance. As the loan is unsecured, you do not have to put an asset (such as your home) down as security against the loan.

Most banks and other lenders offer personal loans, and you can typically expect to borrow between £1,000 and £25,000 over a relatively short period (compared to a secured loan).

Personal loans can be taken out for a range of different reasons, and lenders tend to specialise packages depending on whether you wish to use the loan for home improvements, car purchase, debt consolidation etc.

So, the short answer is yes, it is possible to apply for a £ 10000 personal loan. However, lenders will assess your credit profile and want to ensure you can afford to make repayments before they accept you.

Can I Get a £10000 Homeowner Loan?

A secured loan (also known as a second-charge or homeowner loan) is a loan you take out with a particular asset (usually your home) put up as security. As a result, legally speaking, the creditor from whom you are borrowing the money will retain legal ownership of the asset in question until you repay the loan.

Secured loans can be used for almost all legal purposes. Because they tend to have larger borrowing amounts and longer repayment terms, they are commonly used for home improvements, home extensions, and debt consolidation.

You might also wish to consider other types of borrowing besides personal and homeowner loans, such as authorised overdrafts and credit cards.

Can I Get a £10000 Business Loan?

If you are a business owner sourcing finance is typically done on the trading record of the business. Lenders will look at your annual accounts and typically the last 3 months bank statements in assessing whether they will lend. Unsecured business loans will still often require a director of the business to provide a personal guarantee. Use our loan service to see if your business qualifies for a £10000 business loan. Repayment terms range from 3 months to 5 years.

Can I Get a £10000 Bridging Loan?

Bridging loans are secured on property, and most lenders in the UK will have a minimum loan size of £25,000, with many starting at £50,000. So for a bridging loan of £10,000 the short answer is probably not and you may be better looking at other loan options for a sum of this size.

Considerations before taking out a £10000 loan

Generally speaking, there is no right or wrong loan option when taking out a £ 10000 loan.

However, depending on your personal circumstances, some options are likely to be more suitable for your needs than others. Before committing to a loan we strongly recommend that you compare the market in looking at your loan options.

We provide a loan calculator on this site. For secured loans, business loans and bridging loans you should speak to a qualified loan broker who can evaluate your situation and provide you with unbiased, expert advice to make the right decision for you.