How to get a £12000 Loan

Looking for a £12000 loan?

You might have noticed that there’s quite a wide range of £12000 loan 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 bank loans amongst those taking out loans of £12,000 tend to be personal loans and homeowner loans.

How much does a £12000 loan cost

Loan Repayment Example

Loan Repayment Example

Let’s work through the example of a loan of £12,000 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: £12,000
  • 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. \( M = 12000 \times \frac{0.00685}{0.34885} \approx 12000 \times 0.01963 \approx 235.56 \)

Monthly Repayment

The monthly repayment is approximately £235.56.

Summary

If you take out a loan of £12,000 over 5 years with an APR of 6.1%, your monthly repayment would be approximately £235.56. 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.

Use our loan calculator »

Calculations are based on the interest rate being fixed over the term and no repayments are missed. Please note that many lenders will typically apply their best loan rates for loans between £7,500 and £25,000, and for lower amounts, you will pay a higher rate of interest.

How to get a £12000 personal loan

A personal loan tends to be more straightforward than other forms of finance. As the loan is unsecured, you must not put an asset (such as your home) down as collateral against the loan. Personal loans are offered by the majority of banks and other lenders, and you can typically expect to borrow between £1,000 and £25,000 over a relatively short period of time (in comparison to a secured loan).

Personal loans can be taken out for a variety 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.

How to get a £12,000 homeowner loan

A secured loan (also known as a second charge loan) is a loan that you take out with a particular asset of yours (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 home owner loans, such as authorised overdrafts and credit cards.

Can I Get a £12000 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 three months’ bank statements in assessing whether they will lend. Unsecured business loans still often require a business director to provide a personal guarantee. Use our loan service to see if your business qualifies for a £ 12,000 business loan. Repayment terms range from 3 months to 5 years.

Can I Get a £12000 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 £12,000 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 £12000 loan

Generally speaking, there is no right or wrong loan option when taking out a £12000 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 for 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.