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By personal loan standards, a £2,000 loan isn’t huge, but the range of interest rates lenders offer on these loans is. That means it’s important to make sure you only apply for loans offering the most competitive rates available to you, which you’re confident you’ll get approved for. Here’s how to access the best rates you can and get your application across the line.
Frustratingly, some of the big high-street banks aren’t interested in £2,000 loans, and as such, reserve their most competitive rates for larger loans that they deem worth the admin. To identify the cheapest way to borrow £2,000, you should also consider alternative options such as a credit card.
Late repayments can cause you serious money problems. See our debt help guides.
Here are some of the key factors you’ll want to consider when shopping around for the right personal loan:
Borrowing for longer usually brings monthly repayments down to more affordable levels. However it also pushes up the total cost of borrowing, making it important to secure a competitive rate. Here are some examples of £2,000 loans at varying rates and loan durations.
|Interest rate of 5.0% fixed p.a.||Interest rate of 10.0% fixed p.a.||Interest rate of 25.0% fixed p.a.|
|1 year term||£171.21 monthly,|
|2 year term||£87.74 monthly,|
|3 year term||£59.94 monthly,|
There are obviously a few different way to get your hands on £2,000 – you could borrow from a friend or family member, for example, or even sell assets.
Getting a credit card normally takes a little longer (typically 2-3 weeks) than a personal loan (typically 1-3 days), and can be harder to get approved for. They’re also an ongoing, flexible form of credit, with low minimum monthly repayments – so they require self-discipline if you actually want to clear debt without it costing you the earth. However, the good news is that many cards come with long 0% interest periods on purchases or balance transfers, so, if you’re organised and you can get approved for one, they can be a smart way to borrow. With a credit card, you’ll normally only pay interest for the money you spend, from the day you spend it, as opposed to having to decide a lump sum to borrow upfront.
You could also consider talking to your bank about extending your arranged overdraft. Realistically, this will normally only work out cheaper if you can repay the money very quickly. If your bank’s happy to do so, this is likely to be a speedy option and you should only have to pay interest for the days on which you use the overdraft. Your bank should be able to give you a clear idea of costs, which you can compare against a personal loan. If you’re not happy with the deal they offer you, you may decide to switch your current account to another financial institution with a better deal.
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