From vehicle repairs or buying a new car to general home improvements, when you need a loan, the first step is to find the most affordable interest rates, and a suitable credit provider to protect your financial future. It is important to find a loan you can afford including low interest, late payment penalties and the best value. We look at different financing options based on a £5000 loan.
The First Step – Make Comparisons of Borrowing a Loan of £5000
To determine which loan is right for your needs, it is best to learn which financial options are available and what you can afford. Before you go out and take on the financial responsibility of a loan, we offer simple tips you can follow across financing options to find the best monetary solution.
Consider the Credit Card without Interest Offering a Balance Transfer and 15 Months’ Worth of New Card Purchases
- This financial option is ideal for borrowing finances without having to cover immediate interest.
- It is most beneficial for new expenditures that you have considered for some time including home renovations or transfer of credit and card debts.
- Take advantage of expanding your borrowing expenses where it is possible to transfer your balance after the 15 month promotional timeframe to an interest free deal of 0%.
- To benefit from this option, your credit must be in good standing. Your basic income will also have to comply with loan requirements.
- An evaluation of individual circumstances and loan standards must be completed to determine qualification for the 15 month promotion, the APR and the finances available for transfer.
- If you are interested in proceeding with the card options, always learn the finer details before proceeding with a commitment. Not every provider of every card will deliver the same type of promotion of an interest-free option for balance transfer and new payments.
- Keep track of your introductory period to make the necessary changes before it expires. Upon the end of the promotion, your APR will return to the standard 17.7%.
- You can benefit from a lack of interest on the purchases made within the promotional period, but be mindful of the payment of 1-2.5% on the balance owed. If you do not settle this amount, you could face penalties affecting your credit and a charge of £12. The promotion for continued interest free purchases may fall away in such instances.
What is the Average Interest Rate or APR?
- The transfer of a sum worth £5000 will not be subject to additional interest.
- The APR is represented by 17.7% upon the expiration of the introductory period.
You Can Expect a Monthly Repayment of:
- £333.33, this is upon the full settlement of the loan once the 15 month period is reached.
The Total Repayment of the Loan
Your loan repayment after 15 months will total £5150 [This includes the original £5000 plus the single transfer fee of £150 according to 3% rate.
Option 2- Unsecured Loan
- Helps with creating a budget, Receive fixed rates for interest and repayments monthly.
- Most beneficial for a planned expense or the consolidation of credit and store card debt.
- The indicated APR is not always guaranteed as it is determined by credit history.
- Monthly costs are reduced with a long term repayment but the total debt paid back will be more.
- Expect an APR of 11.72%
You Can Expect a Monthly Repayment of:
The Total Repayment is:
- The original £5,000 loan plus the £1,631 interest = £6,631
- Take Out a Mortgage Advance of £5,000 from Your Current Lender and Settle Over 15 Years
Will increase property resale value if used for home modifications.
- A product management fee of £100 may be requested.
- Sufficient property equity must be present to utilize this option.
- Failure to settle the loan repayment could lead to home foreclosure.
- Monthly rates are more affordable however; total interest and combined monthly repayment will increase the final loan repayment.
- The monthly payment may vary once the fixed interest period has passed.
Expected Monthly Repayment
Amount to be Repaid
- The original £5,000 borrowed plus the £2,225 interest and a £100 arrangement fee = £7325
- These figures are based on annual interest rates.
- Seek a Secured £5,000 Homeowner Loan Over 15 Years
- A property owner must possess a minimum 25-35% equity in the home. It is also available for those who cannot obtain an unsecured loan because of bad credit.
You can use this type of loan for home improvements or debt consolidation.
- The interest on a secured homeowner loan is high.
- APR is influenced by credit score.
- A product arrangement fee is issued and added to the loan sum.
- Only available to property owners with sufficient home-based equity.
- A failure to make the monthly loan repayments could lead to foreclosure.
An average 19.9% determined by an acceptable credit rating.
The Expected Monthly Repayment
Total Expected Repayment
The £5000 plus £9679 = £14,679