We here at Sunny Loans UK understand that everyone has different financial needs. That’s why we’re here to help you find out how you can get a £5000 loan. There are many reasons that you might want to get a £5000 loan, whether you want to pay off a debt, or maybe you want to have home improvements done.
What Factors Do You Need To Consider To Get A £5000 Loan?
The costs of a £5000 loan depend on a number of factors, including the term of the loan such as how long you plan to borrow for. A longer loan will mean that the monthly repayments are lower overall, but they will be more expensive if you include the amount of interest you may accumulate. This is why you need to look at the interest rate or the APR, which is determined by each lender.
The lender will decide on the loan terms and APR based on your credit score and financial history. If you want to know how much a loan costs, many of them include loan calculators to help you understand how much your loan will cost with different credit histories factored in. Most importantly, you need to consider that some £5000 loans will need to be repaid over an extended period.
You need to know if you can afford the loan in the long run, and if you have stable employment. We recommend only getting a £5000 loan if you expect to be able to pay it off. If you’re worried about repaying it, you should consider if you need a guarantor for your loan. But most importantly, you need to consider if you have a good credit history or not.
What If You Have A Poor Credit History?
If you do have a poor credit history, that doesn’t mean you’re completely ineligible for a £5000 loan. However, we can’t say that it won’t be more of a challenge. There are specialist lenders who offer loans for people with poor or no credit history, but they have higher interest rates and lower limits. This makes these loans more expensive in the long run. We here at Sunny Loans UK can help you improve your credit score with our helpful tips.
Improving Your Credit Score
If you want to improve your credit score, you should confirm where you live by registering your current address on the electoral roll. Even if you live in temporary accommodation or live at home, it’s best to do this so you have evidence that you reside there. We know how difficult it is to improve your credit score, but what if you don’t have a credit history? Then the good news is, that if you have no history, you can still improve your credit.
We suggest that you always make your payments on time. If you pay regularly into your accounts, then your lender will see that you know how to reliably pay on time. It improves your reputation among them. One way they can see this is if you have a credit card. However, there are pitfalls to having your own credit card. When you have a credit card, you can be tempted to spend more and keep track of repayments.
So, you should only get a credit card when you know that you’re going to be careful with it. It also means that there may be fraudsters who may pretend to be you so they can spend money you will have to pay back. When you have a credit card, we recommend that you use your card when you need to, but you should keep the percentage as low as you can. Let’s say you have a credit limit of £500.
50% of this would be £250. If you pay back on time, your lenders will be able to see that you’re a responsible lender. You should keep your credit utilisation score below 50% so your lenders will see that you’re a responsible lender. Ideally, you should keep your score below 30% in this case, as it allows you to keep track of payments easier.
Overall, it’s better to not move home a lot, and don’t apply for more credit cards than you can afford. So long as you are responsible with your usage, and keep an eye on a paper trail, you should have no issues with improving your credit score.
What Should You Look For When Applying For A £5000 Loan?
There are a few things that you should look for when you’re applying for a £5000 loan. Here are some things you should look for when you’re applying for a £5000 loan.
Is There A Soft Search?
Before you apply for a loan, then you should see if you can check if you’re eligible for a loan without getting marked on your credit report. It’s better to check if there is a soft search on the application, as you can see if you’re eligible and how much it would cost, without harming your score.
Are There Repayment Holidays?
Depending on where you get your loan, your lender may offer you a repayment holiday. These repayment holidays are helpful if you can’t pay your loan for a certain amount of time. Whether you’ve fallen on hard times, are on maternity leave, or have had to make an unexpected large purchase, these repayment holidays can be helpful. So it’s best to check if there are repayment holidays considered in the loan.
Are There Early Repayment Fees?
Some lenders will charge you for early repayment fees, so you should consider this if you want to pay your loan off early. This fee exists so that some lenders can make back on the amount of interest they would lose if you paid off this loan normally. Consider how much it will cost you so you can decide if you want to pay your loan off earlier than expected.
Do You Need A Guarantor?
You could get a £5000 loan without a guarantor, but you should check that you have a good credit score. If you’ve struggled with debts, you may still be able to get a £5000 loan, but you may have to contend with a competitive interest rate.
However, if you do get a guarantor, you need to consider if they’re over the age of 18, and if they’re in full-time employment. It needs to be a guarantor you trust, so you need to consider if a close friend or family member will help you if you need it.
Final Thoughts
We at Sunny Loans UK understand that getting a £5000 loan is difficult. We recommend that you only get a £5000 loan if you can afford it. If you feel you may struggle to repay it, consider requesting a short term loan or borrowing a lower amount. £5000 is a lot of money, so we recommend thinking about whether you can afford it before you commit.
If you’re ineligible for a £5000 loan, you shouldn’t be disheartened. If you take our steps to improve your credit score, we believe that you won’t have trouble being approved in the future.