How to get an £80,000 personal loan with the best rate

Overview

An £80,000 personal loan might sound like an incredible amount to borrow, but there are lenders who will approve this loan in certain circumstances.

You’ll only be able to borrow this amount with a loan secured against a property you own. With this type of secured loan, the lender will be able to repossess your home if you fall too far behind on repayments.

Your ability to be approved for an £80,000 loan will largely depend on your earnings and the amount of equity you’ve built in your property. Lenders will check your bank statements and employment information to ensure you can comfortably afford the monthly repayments, so a consistent income and low amounts of existing debt will prove useful.

How do secured/homeowner loans work?

A personal loan secured against your property works very similarly to a second mortgage, although there are no conveyancers involved.

To approve your loan, the lender will need to conduct an evaluation of your finances and the property you’re using as collateral.

After you’ve applied for the loan, the lender will typically conduct a telephone interview to get a better idea of your financial situation.

If you meet the lending criteria, you’ll be issued a formal offer, subject to a valuation of your property. The valuation will usually require an official property inspection and you may need to get permission from your mortgage lender.

If all is well and good, you can expect the money to be transferred into your bank account shortly after. The entire application process typically takes around three weeks to complete.

How do I compare lenders?

It’s worth taking your time to compare all the personal loan offers across the market using a comparison website.

When you’re borrowing an amount as significant as £80,000 over a long period of time, the slightest improvement in interest could make a significant difference to your bank account.

The advertised interest rate is not all you need to think about, though. Here’s a full list of factors to consider.

• Lending criteria. A lender will usually publish its basic eligibility criteria online. You may also find criteria for specific loans. This could include details of expected minimum income, employment type or minimum equity in your property, among other things. Check to see if you meet these criteria before applying for a loan.
• Rate. The loan’s “representative APR” will be advertised. This is the rate that has to be offered to at least 51% of customers. If you’re deemed a particularly risky applicant, you may be offered a rate that’s higher than this.
• Term length. This is the number of months you’ll spend repaying the loan. A loan with a longer term may have lower monthly repayments, but you’ll pay more overall due to extra interest charges.
• Arrangement fees. Some personal loans include one-off fees paid at the start of the term, although this is rare nowadays.
• Total payable. The total amount paid over the term of the loan. This is the most important factor to consider.

Should I just remortgage?

You may be able to get £80,000 worth of your property’s equity transferred into your bank account by remortgaging.

A remortgage can be more cost-effective than a personal loan, especially when mortgage rates are low across the board. It’s often possible to remortgage with a different provider, although there may be additional fees associated with that.

To ensure you get the best deal, compare the total amount you’d need to pay if you remortgaged to the total amount you’d pay with a personal loan to see which is the better option for you.

Read our full guide to remortgaging

£80,000 loan illustrations

Frequently asked questions

• What can I use an £80,000 personal loan for?

  Lenders rarely set official boundaries on what a personal loan can be spent on. However, they’ll usually ask what you plan to use the money for, and they may use your answer as part of your eligibility assessment. If you’re using the money for a long-term investment such as debt consolidation or home improvement, you may be more likely to be approved for a loan.

• How long will the loan term be?

  You may be able to choose your desired term, although each lender will offer a minimum and maximum length based on your personal circumstances. You can typically expect to be offered a term of between 10 and 20 years.

• Can I get an £80,000 loan with bad credit?

  It’s more difficult to be approved for a large loan with bad credit. However, some specialist lenders may still consider you, especially if you apply for a secured loan.