A £70,000 personal loan can make a dramatic impact on your day-to-day life, perhaps by funding home improvements or consolidating existing debt. To get your hands on a loan of this size, you’ll need to be a homeowner, have accrued more than £70,000 in equity and be willing to “secure” your loan against your property. This gives the lender the right to repossess your home if you fall too deep into arrears on your loan repayments.
In theory, you can use a £70,000 loan for almost anything you like. Lenders typically only stipulate a handful of exceptions – such as criminal activities, gambling, investments involving risk or using the funds to secure an even bigger loan.
In reality, when a lender evaluates your loan application, they’ll want to check that you plan to use the money for something sensible. Home improvements that add value to your property, for example.
So, while lenders don’t go into great detail about the numerous daft ways you could blow £70,000, a sensible purpose for the borrowing will boost your chances of being approved for the loan. Some of the more standard purposes (which lenders encounter frequently and may be more likely to “rubber stamp”) include:
This varies based on both the interest rate you receive and the length of your loan. For example, a £70,000 loan with a 10-year term and 7% fixed annual rate could have monthly payments of around £813. In comparison, a £70,000 loan with a 20-year term and 9% fixed rate may cost around £630 per month. You can calculate the cost of your £70k loan here.
| 5% annual interest rate | 9% annual interest rate | 11% annual interest rate | |
|---|---|---|---|
| 8-year loan | £886 | £1,026 | £1,100 |
| 10-year loan | £742 | £887 | £964 |
| 12-year loan | £647 | £797 | £877 |
| 15-year loan | £554 | £710 | £796 |
| 20-year loan | £462 | £630 | £723 |
| 25-year loan | £409 | £587 | £686 |
Again, this varies based on both the interest rate you receive and the length of your loan. For example, on a £70,000 loan with a 10-year term and 7% fixed annual rate, you’d pay back around £97,531 overall. That’s £27,531 in interest. In comparison, on a £70,000 loan with a 20-year term and 9% fixed rate, you’d pay back around £151,154 overall. That’s £81,154 in interest. You can calculate the cost of your £70,000 loan here.
| 5% annual interest rate | 9% annual interest rate | 11% annual interest rate | |
|---|---|---|---|
| 8-year loan | £85,075 | £98,449 | £105,561 |
| 10-year loan | £89,095 | £106,408 | £115,710 |
| 12-year loan | £93,229 | £114,713 | £126,358 |
| 15-year loan | £99,640 | £127,798 | £143,211 |
| 20-year loan | £110,873 | £151,154 | £173,408 |
| 25-year loan | £122,764 | £176,231 | £205,824 |
Lenders can mitigate their risk against borrowers falling into arrears by asking for personal assets to be put up as collateral. This is called a secured loan.
For personal loans as large as £70,000, lenders will likely only offer secured loans with a property put up as collateral. These loans, therefore, work in a similar way to a second mortgage, although there are no solicitors required. Lenders tend to be more lenient about who they’ll offer secured loans to compared to unsecured loans.
When organising this type of secured loan, lenders will arrange a telephone interview after you’ve submitted your online application. If you’re approved for a loan, you’ll be issued a formal offer, subject to a valuation of the property.
The valuation may require permission from your mortgage lenders and for someone to inspect your home. You can expect the entire application process to take around 3 weeks.
With a £70,000 loan, the difference between applying for the best available deal and the rest can make a significant impact on your monthly outgoings and the overall cost of borrowing. After all, you’ll most likely be paying interest on a sizeable amount of money for 10 years or more. A good broker can help you find the cheapest loan available to you.
The interest rates advertised are not the only factor that narrow down lenders, however. Below is a list of factors that play a role in defining the most suitable lender for your circumstances:
Potentially. If you’ve built up more than £70,000 of equity in your home, then remortgaging could allow you to tap into that. Remortgaging can effectively act as an alternative to a personal loan and could work out cheaper, depending on current mortgage rates. In fact, many people might also prefer the simplicity of a single loan.
It generally makes sense to remortgage every couple of years anyway, whether that’s to a brand new mortgage provider or to a better product with your existing lender. This is because banks’ “standard variable rates” – which kick in after any introductory rates have finished – tend not to be competitive.
If you’re currently enjoying a wonderfully low fixed rate on your mortgage, you may not want to disrupt it (and incur penalty fees in the process – although these can sometimes be worth shouldering). Similarly, if your credit record has taken a bit of a bruising since you took out your existing mortgage, and the rates you’re now being offered are significantly higher, then you may once again prefer to leave your existing mortgage alone.
Bear in mind that topping up your mortgage by £70,000 is likely to have a significant impact on your LTV (loan-to-value ratio), so the best mortgage rates on the market may be off the table.
Additionally, if remortgaging would mean that you end up paying off the £70,000 over 20 years, when you might otherwise have paid it off in, say, 10 years, then it could end up costing you significantly more overall.
You should aim to evaluate the overall costs of all your options to discover which is best for you. As a general rule of thumb (for any borrowing), aim for the loan that costs the least overall while offering monthly repayments you can afford.
See our full guide on remortgaging
A £70,000 personal loan could drastically change your everyday life if you successfully apply for one. Before you apply for any loan, ensure that you fulfil the specific criteria and are taking a loan out for a good reason – such as for home improvements or debt consolidation. Be aware that some lenders may require you to back your loan with collateral, such as your home.
Use our free secured loan calculator to find out how much you could borrow and check your eligibility with multiple UK lenders in minutes.
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