How to get a £20,000 loan with the best rate

Want to borrow £20,000? A £20k loan is close to the maximum amount that many banks are prepared to lend without securing the loan against property. Use our online calculator to find the best rates available to you.

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£20,000 loan calculator

Table: sorted by representative APR, promoted deals first

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Check your personalised rates and likelihood of acceptance.

Use our online calculator to compare the representative APRs that mainstream lenders offer on £20k loans.

Name Product Total Payable Monthly Repayment Representative APR Link
Lending Works Personal Loan
Check eligibility
View details
Representative example: Borrow £10,000.00 over 3 years at a rate of 5.8% p.a. (fixed) with an application fee of £0.00. Representative APR 10.0% and total payable £11,543.40 in monthly repayments of £320.65.
Barclays Bank Existing Current Account Customer Barclayloan
View details
Representative example: Borrow £10,000.00 over 3 years at a rate of 5.5% p.a. (fixed). Representative APR 5.5% and total payable £10,848.60 in monthly repayments of £301.35.
Creation Financial Services Argos Unsecured Personal Loan
Creation Financial Services Argos Unsecured Personal Loan
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Representative example: Borrow £10,000.00 over 3 years at a rate of 9.9% p.a. (fixed). Representative APR 9.9% and total payable £11,527.92 in monthly repayments of £320.22.
Lloyds Bank Existing Customer Personal Loan
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Representative example: Borrow £10,000.00 over 3 years at a rate of 3.9% p.a. (fixed). Representative APR 3.9% and total payable £10,601.64 in monthly repayments of £294.49.
My Community Bank Personal Loan
Check eligibility
View details
Representative example: Borrow £10,000.00 over 3 years at a rate of 23.9% p.a. (fixed). Representative APR 23.9% and total payable £13,678.20 in monthly repayments of £379.95.
Zopa Personal Loan
Check eligibility
View details
Representative example: Borrow £10,000.00 over 5 years at a rate of 8.8% p.a. (fixed) with an application fee of £240.00. Representative APR 9.9% and total payable £12,602.87 in monthly repayments of £210.05.
Hitachi Personal Finance Hitachi Personal Loan
Check eligibility
View details
Representative example: Borrow £10,000.00 over 3 years at a rate of 3.5% p.a. (fixed). Representative APR 3.5% and total payable £10,539.72 in monthly repayments of £292.77.
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Please note: You should always refer to your loan agreement for exact repayment amounts as they may vary from our results.

Late repayments can cause you serious money problems. See our debt help guides.

How can I get a £20,000 loan?

Whether you’re consolidating debt, improving your home, funding a wedding or making a large purchase, £20,000 can be a life-changing sum. But it’s close to the £25,000 threshold at which many lenders stop issuing loans without security, and so if you’re after an unsecured loan, lenders will want to see a solid track record of responsible borrowing – in other words, a strong credit record.

Can I get a £20,000 loan with bad credit?

While there are specialist lenders who offer loans to people whose credit history isn’t perfect, it’s tougher to find a lender willing to offer as much as £20,000 to a borrower with bad credit.

Guarantor loans allow people with bad credit to leverage the good credit of a friend or relative, but are typically capped at £10,000, or £15,000 if your guarantor is a homeowner.

However, if you’re a homeowner with a mortgage, you could use the equity in you property as security. Having security means that a loan represents lower risk to a lender, which normally in turn means lower rates and a greater likelihood of approval for the borrower. If you’re spreading repayment over 15 years, however, then obviously the overall cost of borrowing is likely to higher despite the annual rate being lower. It’s a major commitment (take a moment to read through our secured loans guide) but it could let you access rates below 15%.

Compare secured loan rates

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured on it.

Can I get a £20,000 loan with good credit?

If you’re looking at borrowing £20,000 and you already know you have a good credit rating, then you may be able to go after the very best rates on the market.

Crucially, you’ll still need to be able to afford any loan that you apply for. You could have the best credit record going, but if you’re unrealistic about what you can comfortably repay each month, your application will be rejected. Spreading your loan over a longer term brings down the monthly repayment figure, making it more affordable, but also pushes up the overall cost of the loan. Aim to find a balance – keeping the overall cost as low as you can, while ensuring the repayment schedule is manageable. If you’ve done your sums and feel that you’d be able to afford the loan you’re applying for, then there’s a strong chance a lender will reach the same conclusion.

Provided you can do this, you’re likely to be able to apply to the majority of lenders and enjoy their most competitive rates. Your current bank may even offer same-day funding to existing customers, although it almost always pays to shop around. With such a sizeable loan, even a small difference in the interest rate can mean big savings – especially if you’re borrowing over a number of years.

Browse bank rates

Can I get a £20,000 for business purposes?

In many cases, a condition for taking out a personal loan is that it cannot be used for business purposes. However, there are a huge range of loan products available specifically for use by businesses, and some are even government-backed, which can mean lower rates for borrowers.

Compare £20,000 business loans

Some lenders summarise eligibility in three C's

  • Character is about creditworthiness and how you’ve handled your debt payments in the past.
  • Capital is perhaps better-described as collateral. You may be able to rely on capital by getting a secured loan, using an asset the lender can take possession of if you don’t repay the loan as you’ve agreed to.
  • Capacity refers to your ability to repay the loan. The lender will evaluate the length and type of your employment as well as your income and debt-to-income ratio. If you’ve been in your current employment for a short time, your previous job history may be important. The lender will analyse your ability to handle the new monthly payment.

What is the monthly payment on a £20,000 loan?

Your monthly and annual payments will vary based on your interest rate and the length of your loan term. For example, a £20k loan with a fixed rate of 5% p.a. and a 5-year term will have monthly repayments of £377.42. In comparison, a £20,000 loan with a fixed 10% annual rate and 10-year loan term would cost £264.30 each month. You can calculate the cost of your loan here.

Interest rate of 5.0% fixed p.a.Interest rate of 10.0% fixed p.a.Interest rate of 15.0% fixed p.a.
Over 3 years£599.42£645.34£693.31
Over 5 years£377.42£424.94£475.80
Over 7 years£282.68£332.02£385.94

How much is a £20,000 loan over…

3% p.a. interest5% p.a. interest10% p.a. interest
1 year£20,326£20,546£21,100
3 years£20,938£21,579£23,232
5 years£21,562£22,645£25,496
7 years£22,198£23,745£27,890

The above loan illustrations are based on a flat rate and are only approximations of what you may pay. Your specific loan payments may differ depending on things like fees, your repayment schedule, and whether you rate is fixed or variable.

How do the repayments work?

In most cases, you’ll simply pay a fixed sum each month by direct debit. But behind the scenes, your monthly payment will be split into paying off all the interest you’ve accrued so far, and then paying off a chunk of the original sum borrowed. Your first repayment will contain a relatively large amount of interest, while your final repayment will hardly contain any.

Here’s an illustration of the repayments on a £20,000 loan over five years at an APR of 7%. Each bar represents a monthly £394 payment, and you can click/hover to see how that month’s payment is broken down.

Repayment 1Repayment 60Interest proportion of repaymentCapital proportion of repaymentOutstanding loan balance
RepaymentAmountInterestOutstanding:Capital

Self-employed personal loans

With the rise in remote working and digital nomads, mainstream lenders know self employment is a growing market and are more willing to consider self employed applicants. That said, you still have to know your stuff to prove yourself an eligible candidate, so make sure you read up on the loan requirement and how to go about applying.

Compare loans for the self-employed

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