Compare £2,000 loans

This guide will help you to compare the best £2,000 loans available in the UK and we’ve created a number of tools to help you check if you will be eligible for the loan. Use our eligibility checker tool which gives you a much more personalised experience and gives a more specific answer as to the likelihood of your loan application being accepted.

3 steps to find the right £2,000 loan for you

By personal loan standards, a £2,000 loan isn’t huge, but the range of interest rates lenders offer on these loans is. That means it’s important to make sure you only apply for loans offering the most competitive rates available to you, and which you’re confident you’ll get approved for.

Frustratingly, some of the big high-street banks aren’t interested in lending lower sums, and as such, reserve their most competitive rates for larger loans that they deem worth the admin. To identify the cheapest way to borrow, you should also consider alternative options such as a credit card.

There are a number of things to keep in mind when comparing your options:

1. First off, consider if a personal loan is the best option. Some credit cards offer 0% interest on purchases for a number of months. If you can get approved and the card issuer is willing to offer you a credit limit of £2,000 or more (credit limits are based on the card issuer’s assessment of your circumstances), and if you have the self-discipline to repay the debt before the 0% period expires without using the card for anything else (yes, that’s a lot of ifs), then a credit card could well be a cheaper option.
2. If you’re set on a loan, don’t hit “apply” without being confident you’ll get approved. Almost all lenders now let you check your eligibility before you apply, without affecting your credit score.
3. Use a good broker or “loan matching service” to check your eligibility with multiple lenders in one go. This could save you time and disappointment, and protect your credit score too. You’ll need to enter a few basic details about yourself in order for the service to run a “soft search” of your credit file and run live checks with a panel of lenders. You’ll then be able to compare pre-approved rates, rather than the headline-grabbing representative APRs that lenders only offer to certain customers and on certain loan amounts.

How should I compare £2,000 loans?

Here are some of the key factors you’ll want to consider when shopping around for the right personal loan:

• Total amount payable. Don’t fall into the trap of paying attention to the rate and not the overall cost. Aim to keep instalments affordable and the total cost as low as possible.
• Loan durations. Usually the length of the loan will be determined by how much you can afford to pay each month. Loans of 1-7 years are the norm, although a few lenders offer 6-month terms.
• Eligibility. Never apply for a loan until you’ve checked the eligibility criteria. As well as wasting your own time, each loan application will be visible in your credit report – too many of these, and you’re likely to put off prospective lenders.
• Rates. Lenders refer to their loan’s “Representative APR” but are actually only obliged to award this rate to 51% of those who take out the loan. The other 49% could be given a higher rate. Lenders will normally give you a more accurate quote, plus your likelihood of approval, when you give them a few more details about yourself, including your address, bank account details and salary. This process can involve a credit check, but should not affect your credit rating.
• Fees. Although set-up/product fees are increasingly rare, it’s worth checking this for the loans that you’re considering.
• Turnaround time. The time it takes to get your loan approved and for it to arrive into your bank account will differ between lenders. Make sure the lender you apply with can get your loan amount to you when you need it.
• Early repayment. While lenders will not normally penalise you for paying back some or all of the loan early, that doesn’t necessarily mean that doing so will save you money in interest. You could be charged one or even two months’ interest to settle your loan early, so if early repayment is on the cards, or if you plan to try to overpay a little each month, check the terms to see how much this would actually benefit you.

£2,000 loan illustrations

Borrowing for longer usually brings monthly repayments down to more affordable levels. However it also pushes up the total cost of borrowing, making it important to secure a competitive rate. Here are some examples of £2,000 loans at varying rates and loan durations.

How do the repayments work on a £2,000 loan?

Usually, you’ll make monthly payments on or just after your payday, by direct debit. With a fixed-rate loan, you’ll pay the same amount every month, and you’ll know in advance what the loan is going to cost you overall.

Below is an example of a £2,000 loan over 2 years at a fixed rate of 12%. Each bar represents a £93.58 monthly payment, and you can click/hover to see details of each. At the start of the loan, a sizeable proportion of the monthly repayment is servicing the interest that has accrued, while towards the end of the loan very little interest is accruing.

Are there alternative options?

There are obviously a few different ways to get your hands on £2,000 – you could borrow from a friend or family member, for example, or even sell assets.

Getting a credit card normally takes a little longer (typically 2-3 weeks) than a personal loan (typically 1-3 days), and can be harder to get approved for. They’re also an ongoing, flexible form of credit, with low minimum monthly repayments – so they require self-discipline if you actually want to clear debt without it costing you the earth. However, the good news is that many cards come with long 0% interest periods on purchases or balance transfers, so, if you’re organised and you can get approved for one, they can be a smart way to borrow. With a credit card, you’ll normally only pay interest for the money you spend, from the day you spend it, as opposed to having to decide a lump sum to borrow upfront.

You could also consider talking to your bank about extending your arranged overdraft. Realistically, this will normally only work out cheaper if you can repay the money very quickly. If your bank’s happy to do so, this is likely to be a speedy option and you should only have to pay interest for the days on which you use the overdraft. Your bank should be able to give you a clear idea of costs, which you can compare against a personal loan. If you’re not happy with the deal they offer you, you may decide to switch your current account to another financial institution with a better deal.

Tips for making a successful £2,000 loan application

• Work out what you can afford. It’s important that you have a fair idea of what your repayments will look like before you apply for your £2,000 loan. Once you know how much you have to repay, take into account your existing salary and expenses and then determine if you can afford to make the repayments. If you’re confident the loan is comfortably affordable, there’s a good chance that a lender would reach the same conclusion.
• Check the eligibility criteria. On each finder.com loan review page, you’ll find a list of eligibility criteria you need to meet in order to be approved for the loan. This will also be available on the lender’s site. Take some time to go through these before applying. If you have doubts about any part, you can always call the lender. If you’re not eligible, don’t apply – applications are visible in your credit history – too many of these in a short space of time and you’ll put off the lenders.
• Get to know your credit report. It’s a good idea to get a free copy of your credit report online before you apply. Understanding of your credit history will put you in a better position to know what loans you can and can’t apply for.
• Limit your applications. Every time you apply for a loan, it counts as an inquiry on your credit report. Submitting too many applications can negatively affect your credit score, or could give the impression of financial difficulties to a prospective lender.

Frequently asked questions

• What happens after I submit my application?

  At this point lenders will normally want to check that the loan is affordable, based on information you have provided plus information from credit reference agencies. If they deem the loan to be affordable, and are satisfied that you’ll repay the loan, they’ll make you a loan offer. Read through this carefully. When you accept the offer, the lender will then action the drawing down of funds.

• How long does it take?

  British banks can be notoriously slow, but should at least be upfront about how long the process will take. Expect this to vary between lenders, with the fastest taking a matter of minutes and the slowest taking 2-3 working days. If it’s important to you, factor the turnaround times into your comparison.

• Can I repay my loan early?

  It is usually possible to repay your loan early, or to overpay, without penalty. However, this doesn’t guarantee that you’ll save money in interest. Many lenders charge one or two months’ additional interest on sums paid early. The lender’s early-repayment policies will be clearly outlined in the product terms, so if you hope to make overpayments on your loan, or to clear it early, check the terms of the products you’re considering and factor these into your comparison.

• How can I prevent and protect myself from personal loan fraud?

  As with any online service, you do expose yourself to potential fraud. Our experts have put together a guide of our top tips on how to spot a personal loan scam and what to do if you do get scammed.

Written by

Chris Lilly

Head of publishing

Chris Lilly is Head of publishing at finder.com. He's a specialist in personal finance, from day-to-day banking to investing to borrowing, and is passionate about helping UK consumers make informed decisions about their money. In his spare time Chris likes forcing his kids to exercise more. See full bio

Chris's expertise

Chris has written 609 Finder guides across topics including:

• Loans & credit cards
• Building credit
• Financial health