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Unsecured personal loans are commonly capped at £25,000. However, in most cases, high-street banks are willing to offer unsecured personal loans of £40,000, but will have very strict approval criteria. You may need to be an existing customer, for example. You’ll need to have excellent credit and, most important of all, you’ll need to be able to afford the loan.
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.
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.
|Interest rate of 5% fixed p.a.||Interest rate of 10% fixed p.a.||Interest rate of 25% fixed p.a.|
|1 year loan||Monthly: £3,424.30|
|3 year loan||Monthly: £1,198.34|
|5 year loan||Monthly: £754.85|
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