We have put together the best £10,000 loan rates in the UK for you to choose from, along with some further information on the ins and outs of personal loans. Picking the right loan is important, so we have included all of the key figures to help you make the right call. For the figures in the table in this article, we have used the representative example of repaying a £10,000 loan over five years. You may be offered a different loan amount or a different rate, depending on your credit history, your financial circumstances and how you plan to repay the money.
What is the best loan for £10,000?
The best £10,000 loan for you will depend on your own personal circumstances, but for many people, it will be the deal that offers the full amount and loan term that you want at the lowest rate of interest and with the cheapest fees. Try to compare as many different loan deals as possible to find the best personal loan for you. You will find that the representative APR is a good indication of the cheapest deal, though it will not necessarily be the rate you are offered. Read our article ‘What is representative APR?’ for more information.
Examining a range of lenders is the best way to get an idea of what is available. You may find that one lender offers a good interest rate, but not the term length you want. Another could have the right term length available, but not the full £10,000 you were hoping for. Finding a deal that ticks as many boxes as possible will involve comparing what options are available to you.
Having found the best £10,000 loan deal, it is a good idea not to rush into an application. Take a look at the eligibility criteria first. Some lenders even have an online eligibility checker you can use to see how likely you are to be successful. By checking this before you apply, you can limit the rejections appearing on your credit file. Too many credit applications in a short period will give the impression that you are struggling for money and not managing your finances well, which could make it harder to get credit in the future.
If you need more information on the basics of a loan, read our article ‘What is an unsecured loan?’.
The best rates on a £10,000 loan – November 2023
|Loan provider||Representative APR (from)||Available loan term||Available loan amount||Eligibility checker?|
|Tesco Bank||5.9%¹||1 - 10 years||£1,000 - £35,000||Yes|
|The AA||6.0%²||1 - 7 years||£1,000 - £40,000||Yes|
|Post Office||6.1%||1 - 7 years||£1,000 - £40,000||Yes|
|Sainsbury’s Bank||6.2%³||1 - 7 years||£1,000 - £40,000||No|
|Santander||6.3%||1 - 5 years||£1,000 - £25,000||No|
|M&S Bank||6.6%||1 - 7 years||£1,000 - £25,000||Yes|
|Halifax||6.6%||1 - 7 years||£1,000 - £50,000||Yes|
|Lloyds||6.7%||1 - 7 years||£1,000 - £50,000||Yes (but you will need to be registered for online banking with Lloyds)|
|TSB||6.9%||1 - 7 years||£300 - £50,000||No|
|HSBC||6.9%||1 - 5 years||£1,000 - £25,000||No|
|Zopa||22.9%||1 - 5 years||£1,000 - £25,000||Yes|
Representative APR is based on a 5-year loan term
¹Clubcard members receive a preferential rate, non-members will get from 6.3%
²AA members receive a preferential rate, non-members will get from 6.1%
³Nectar members receive a preferential rate, non-members will get from 6.7%
How a £10,000 loan works
You borrow £10,000 from a provider then repay the debt in monthly instalments, plus interest, over an agreed period of time. It is a means of unsecured borrowing because you do not need to use your home, car or any other valuable asset as security. Read our article ‘Secured vs unsecured loans: Which is best for me?’ to learn which loan type would suit you best. You can start your application for a £10,000 loan online, over the phone or in person at a high-street bank branch. In most cases, you will need to prove that you are a UK resident and over the age of 18.
You will need to pay the money back within the loan period. The lender will have told you how much you need to pay back each month as a part of the application process. What you owe will also start to grow with interest. You can pay more than the minimum amount in order to try and clear your debt more quickly, but some lenders will charge a fee. Any loan fees you have to pay should be made clear by the lender before you sign up.
Can I get a £10,000 loan with no credit check?
No, a lender will conduct a credit check and an affordability check. This is part of deciding if you are a trustworthy borrower and if you can afford the monthly repayments. Some applicants will be rejected, often because the lender decides that there is too great a risk of the repayments not being paid on time. You can avoid unnecessary rejections by keeping track of your credit score and checking your eligibility for a loan online without completing a full application. Find out how to check your score by reading our article ‘The best way to check your credit score for free’ and see what you can do to improve it by reading ‘How to improve your credit score quickly’.
Fortunately, it is possible to get a loan even if you have a low credit score. However, you may need to temper your expectations, as the loan amount, interest rate and loan term you are offered may not be what you had hoped for. This means that overall, a bad credit loan will likely be more expensive than a standard loan. Read our article ‘How can I get a loan with poor credit?’ to learn more.
The key figures in a £10,000 loan
Here are the crucial numbers when you compare £10,000 loans:
- Loan amount - Even if you apply for a £10,000 loan, you may be able to borrow as much as £25,000 or more.
- Loan term - You will usually have up to seven years to repay, but some lenders will offer longer terms and others shorter terms depending on the amount borrowed.
- Loan fees - Fees will vary between lenders and can depend on what you intend to use the money for and when you want to repay it by.
- APR (annual percentage rate) - This is the annual rate that is used to help you work out the cost of borrowing money. It takes into account the interest you are being charged as well as other applicable fees.
- Representative APR (annual percentage rate) - This is the rate that a lender expects at least 51% of successful applicants to be offered. You may get more or less than this figure, but it can be a good way to compare providers.
- Early repayment charge - This is a percentage figure that some lenders will charge if you decide to clear your debt before the end of the loan term. The rules are slightly different if you took out a loan prior to February 2011, however, there should be no charge for paying off up to £8,000. For loans over £8,000, lenders can charge up to 1% of the amount that was repaid early, or 0.5% if you are in the final year of the repayment period.
You should also think about your credit score, as it is an assessment of how trustworthy a borrower you are. A low credit score may mean your application is rejected, while a high score could mean you are offered the lender’s best rates.
How much will a £10,000 loan cost per month?
The monthly repayment on a £10,000 loan with a rate of 5.9% APR works out at £195.15 per month over 60 months. Based on these numbers, the loan will end up costing £11,529 in total. Stretching out the loan term will reduce the monthly payments, but it will make the overall cost greater. This is because there will be more time for the debt to grow with interest. Shortening the loan term will mean you pay less interest, but the monthly payments will go up. It is important to make sure you can afford to pay the monthly repayments in full and on time.
What can I use a £10,000 loan for?
As part of the loan application process, you will usually need to tell the lender how you intend to spend the money. The most common ways to spend a personal loan usually include on:
- A wedding
- A car
- Home improvements
- Debt consolidation
- A holiday
What can't I use a £10,000 loan for?
You can spend your £10,000 loan on most things, but there are a few key exclusions to keep in mind. Your lender may turn down your application automatically if you plan to spend the money on:
- Illegal activity
- Buying shares
- A deposit for a property
Your application could also be rejected if you are borrowing for business purposes, but there are specialist loans for business borrowing. Read our article ‘What is a business loan?’ to learn more.
Pros and cons of a £10,000 loan
We have put together a list of the key advantages and disadvantages of a £10,000 personal loan:
Pros of a £10,000 loan
- Spread the cost of a purchase
- Borrow at a lower long-term interest rate than most credit cards
- Stability of fixed monthly repayments
- Less risk to your assets compared to a secured loan
- Widely available
- Can be repaid early in most cases (though sometimes for a cost)
- Applications can be approved and money paid out relatively quickly
Cons of a £10,000 loan
- Difficult to get the best interest rate with bad credit
- No interest-free period
- Can be difficult to borrow a small sum at an affordable rate
- Missing repayments or failed applications can damage your credit score
Alternatives to a £10,000 loan
There are a whole host of different ways to borrow money and spread the cost of purchases, so a £10,000 loan is not your only option. Take a look at the alternatives below to see if any could be a better fit for your borrowing needs.
- Secured loan - Secured loans can allow you to borrow more than you would otherwise be able to with an unsecured loan, but a valuable asset such as your home or car will need to be secured against the debt. This means that it could be sold if you miss your repayments. Read our article ‘What is a secured loan?’ to learn more about this type of borrowing. You could also look at our article 'The best secured loans'.
- Credit card - A credit card gives you more flexibility than a loan, but there is a spending power cost. Only applicants with good credit histories and large incomes will be able to access the very highest credit limits, so £10,000 may be out of reach. However, you will only repay what you spend and there may be 0% interest cards available to you. This could make a credit card cheaper than a loan. Read our article ‘Best credit cards in the UK’ for more information.
- Remortgaging - Through remortgaging, you can borrow more money to release some of the equity that has built up in your home over time. You can then use the money to fund home improvements or cover other expenses. We have more details in our article ‘Remortgage to release equity from your home’.
- Car finance - This is a common alternative to taking out a £10,000 loan to pay for a new car and can be a much more simple option. Whether it is the best method for you will depend on what car you are buying and your credit history. Read our article ‘Buying a car: what are the best finance options?’ to learn more.