The UK's largest range of secured loans
- Loans from £1,000 to £2,500,000
- See your quote before you apply
- Quote won’t affect your credit score
Updated . What changed?
Late repayments can cause you serious money problems. See our debt help guides.
Unsecured personal loans are commonly capped at £25,000. However, in many cases, high-street banks are willing to offer unsecured personal loans of up to £40,000, but will have very strict approval criteria.
If you’re a homeowner (with a mortgage), then another option that could be available to you is a secured “homeowner” loan. These loans allow you to use the equity you’ve built up in your property as security for a lender. By reducing the risk to the lender, you’ll usually be able to borrow more and/or get a lower interest rate than your might otherwise.
Borrowing against your home is obviously a big step though. If you don’t repay the loan, the lender can sell your home to recoup its losses, so it’s important to weigh up your options first, and to be sure you understand what you’re getting into.
|Interest rate of 5% fixed p.a.||Interest rate of 10% fixed p.a.||Interest rate of 20% fixed p.a.|
|5 year loan||£754.85||£849.88||£1,059.76|
|7 year loan||£565.36||£664.05||£888.25|
|10 year loan||£424.26||£528.60||£773.02|
|15 year loan||£316.32||£429.84||£559.83|
|5% p.a. interest||10% p.a. interest||15% p.a. interest|
The loan estimates above use approximate, rounded figures, that are calculated using a flat interest rate. Many secured loans offer variable interest rates, which means your rate can change during the course of your loan, and you may end up paying more, or less, in interest.
Homeowners can get hold of a large lump sum, by remortgaging and borrowing against the equity of their house. This might prove more cost-effective than a personal loan at a time when mortgage rates are low. Ultimately, you need to compare the total payable of both options.
By exploring all of your options for a £40,000 loan in depth, you’ll be likely to find the most suitable lender for your needs and potentially save thousands of pounds compared to the next best deal.
It could also be worth exploring whether you have to borrow 100% of the capital needed for your purchase, or if there are other ways to raise a percentage of the funds. The less money you borrow, the less interest costs you’ll face over the term of the loan. You might even be able to access a better rate too.
There are lenders out there who specialise in offering personal loans to people with bad credit. However, even these specialists will be cautious handing out sums as large as £40,000. Even if you are deemed eligible by these lenders, it’s important to check that you’ll be able to afford the monthly repayments. Fall behind on them and the lender could take legal action against you or repossess your assets.
The process and eligibility criteria are different for business loans. You’ll almost definitely have to apply through a specialist business lender, as most personal loan companies won’t allow you to spend their money on funding a business.
It’s tougher for self-employed people to get their hands on a £40,000 loan than it is for someone in a stable job. Nevertheless, there are lenders who specialise in personal loans for self-employed people. As with ‘bad credit loans’ these companies usually offer higher rates to compensate for the higher risk that self-employed borrowers are seen as.
The coronavirus pandemic led to a lot of uncertainty in the lending market and many lenders battened down the hatches. Most banks drastically reduced the number of loans being issued and tightened-up criteria for eligible applicants. Thankfully this has eased but it’s important to be realistic about what would be affordable for you. If you’ve done your homework an are confident a loan would be affordable for you, then there’s a better chance that the lender will agree with you.
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.