If you’re looking to take out a £20,000 loan, you might be wondering what funding options are available to you.
Firstly, in order to get the best deal to suit your individual needs, it is important to shop around different providers and to consider the different term lengths and interest rates available as this will affect the cost of your repayments. As well as considering other relevant charges such as any arrangement fees. Typically, the two most common ways in which people borrow £20,000 is via a personal or secured loan.
How much does a £20000 loan cost
This will depend on your circumstances, but assuming you have an excellent credit score then you should qualify for a top of the market personal loan rate.
5 year term
Interest rate: 3.3%
Monthly repayments: £362.05
Total cost of credit: £1,722.78
Total loan repayment: £21,722.78
Calculations are based on the interest rate being fixed over the term and no repayments are missed.
A secured loan or home loan is a loan that is protected by an asset or collateral of some sort (usually your home). Secured loans have become popular amongst home owners as they usually offer lower interest rates than unsecured loans. However, secured loans are also perceived as being a more risky method of gaining finance, as if you cannot keep up with repayments, there is the potential for you to lose your home. Homeowner loans are usually preferable when looking to take out larger amounts of money.
It is worth noting that the amount you can borrow, the rate of interest and the loan term is likely to depend on your personal circumstances, market conditions and the amount of equity that you own in your property. Secured loans can be used for an almost endless amount of possibilities providing it is not illegal or for commercial use.
An unsecured personal loan tends to be more straightforward than other forms of finance. As the loan is unsecured, it does not require you to 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).
Whilst personal loans can be used for a variety of different reasons, lenders tend to offer specialised packages depending on whether you are using the capital for home improvements, debt consolidation, car purchase etc.
Find the best loan for you
Deciding which loan is most suitable for your individual needs can be overwhelming, which is why we provide expert and unbiased advice and guidance to help you meet your borrowing goals.
Our team of specialist loan advisors can help analyse your situation, and give you assistance in finding a loan with repayment terms that are suitable for you.