Looking for a £4,000 loan?
Although shopping around can be an exciting time, it’s easy to get lost in the variety of lenders and wide range of financial jargon being used.
That’s why we’re here to clear things up.
In this guide we’ll tell you everything you need to know about borrowing £4,000. Whether that’s knowing your options, what to do if you have bad credit, or what you should actually spend your money on. It’s all here to help you.
What are my options for borrowing £4,000?
If you’re in the market for a £4,000 loan then an unsecured personal loan is a borrowing option worth considering.
Unsecured personal loans use your credit score, which is based on your borrowing history, along with other information to check your eligibility. These loans offer up to £35,000 and repayment periods of 1 to 7 years, with benefits including:
- Fixed monthly payments to budget towards
- Lower interest rates for higher amounts
- Are unattached to any valuables such as property
For medium amounts, such as £4,000, you could also think about getting a credit card. However, you may not get a £4,000 credit limit with a credit card when you apply and, if you don’t repay your card in full, the APR on the credit card may be higher than what you’d be eligible for with a personal loan.
Can I use a personal loan to borrow £4,000 with a bad credit score?
In some cases, a lower credit score may indicate a history of late repayments in previous borrowing. However, it can also simply highlight that you haven’t borrowed much in the past, meaning lenders don’t have a lot of data to evaluate.
Nevertheless, a low credit score doesn’t always mean that you won’t be able to borrow. Instead, it may mean that the amount offered will change or may result in a higher interest rate.
A guarantor loan is another option to consider. These loans are similar to a personal loan but need a guarantor—someone you trust—to agree to cover the cost of the loan if you are unable to make the repayments. Just remember, guarantors can’t usually be a partner or a spouse—in these cases, you can consider joint loans for couples instead.
If you are unsure about what loan you will be offered, use Aro to check to see what you are eligible for. We use a soft credit check to determine which lender is right for you and it won’t affect your credit score.
Can I apply online to borrow 4,000 pounds?
Yes, finding loan lenders and applying online is quick and easy.
One difficulty you may face is deciding which loan provider is the right one. Don’t worry, we’re here to help and have made the process as simple as possible.
To get started, simply visit our free eligibility check tool and tell us about yourself and what you’re looking for.
On our side we’ll run a speedy soft credit search—that won’t appear in your credit report—and use this to identify lenders which are a good fit for your circumstances and needs.
Then it’s up to you. Look through the different options, decide what’s best and make your application.
Once complete, the lender will run a hard credit check and decide whether you’re eligible. If they approve your application, they will send an offer, which includes:
- The loan amount
- The repayment terms
- The interest rate
- Any additional fees or charges
If terms are right for you, then you can accept the offer and the money will be transferred into your account.
Will I receive my loan on the same day?
In most cases an unsecured loan will be transferred shortly after you accept the loan, often on the same working day.
The turnaround time is so quick because unsecured loans don’t rely on additional paperwork. By the time you have an offer from a lender, they have already run all their required checks. All that’s left is to process the transaction.
Once you receive the loan, it is important that you maintain your agreed repayments to avoid incurring any additional charges or impacting your credit score.
Can I afford to borrow £4,000?
Before agreeing and taking out any loan amount, it is essential that you consider whether or not you can afford the set terms.
To do this, check the monthly repayments and proposed repayment schedule to see whether they fit into your budget.
Look at your monthly income and subtract any recurring outgoing payments. This might include utility bills, rent and subscriptions. From that you can then work out the remaining amount. Set aside your average monthly spending budget for things like groceries, travel and leisure activities. If the remaining amount can then comfortably fit in the required loan repayments, then it’s a pretty good sign you can afford it.
In addition to working out how much you can afford; you should factor in a back-up plan. For this you need to work out what you would do if you found yourself unexpectedly losing your source of income. Having this prepared can give you peace of mind when borrowing, and help you keep up with repayments even when uncertainties creep in.
What can I use a £4,000 loan for?
Some of the most popular reasons people look to borrow £4,000 include car loans, debt consolidation, and home furnishing loans.
£4,000 car loans
A £4,000 car loan can help you on your way towards buying that new car you’ve been looking out for. Whether you’re looking to upgrade to an electric or hybrid vehicle or something that can get an expanding family into, a loan can give you the financial flexibility to make the purchase when you need it most.
It’s worth noting that a loan isn’t always the right choice when it comes to acquiring a new motor. Instead, consider the different car finance options available, such hire purchase, personal contract purchase and more.
If you’re interested in learning more about car financing, then our guide should help you find the information you need.
£4,000 home furnishing loans
A £4,000 loan for home furnishing can go a long way. Whether you’re looking at a new sofa, the perfect dining room set, or a complete upgrade on your living room decor—a £4,000 loan can really help to make your house feel like your home.
£4,000 debt consolidation loans
If you currently have a range of existing debts with different repayment schedules and terms, then a debt consolidation loan may be right for you.
Managing multiple repayment terms can quickly start to feel overwhelming, but debt consolidation can make this easier. By merging all your debts into one single loan, you can create one monthly repayment to keep on top of.
Just remember that by consolidating, you could potentially extend the term of your debt and increase the total amount you repay.
Other reasons to borrow
Of course, these aren’t the only ways you can use your loan. You can find information on other common uses of personal loans on our dedicated pages for each:
How do I repay the money I’ve borrowed?
After you accept a loan, you will formally enter into the loan agreement and will be required to make the monthly repayments outlined in the terms.
It is best to set up a direct debit for the repayment to come out on your payday each month. By doing this, you will always be covered, and you won’t find yourself without enough in your account to make the repayment.
Once the debt is paid along with all of the interest and any additional fees, the contract will end, and your account will be closed by the lender.
How long will it take to repay a £4,00 loan?
The amount of time it takes to repay a loan, as well as the total amount that you repay, will vary depending on the terms you have agreed to.
Here is a general guide with a representative APR to give you an idea.
|Amount borrowed||Repayment term||APR (example rate)||Monthly repayments||Total repayment|
|£4,000||12 months (1 year)||19.70%||£366.94||£4,403.32|
|£4,000||24 months (2 years)||19.70%||£199.92||£4,798.15|
|£4,000||36 months (3 years)||19.70%||£144.84||£5,214.42|
|£4,000||60 months (5 years)||19.70%||£101.83||£6,109.74|
Representative example: If you borrow £7,500 over 5 years at a representative APR of 19.7% and an annual rate of 19.7% (fixed) you would pay £190.93 per month. Total charge for credit will be £3,955.76. Total amount repayable is £11,455.76. Minimum repayment period is 12 months. The % APR rate you will be offered is dependent on your personal circumstances. Aro is a leading credit broker, not a lender.
As a general rule, aim to borrow as little as possible and repay it as quickly as possible. As an added benefit, frequent borrowing and repayment can help to boost your credit score.
Is a £4,000 loan right for me?
Still wondering if a £4,000 loan is right for you? Take a quick look at our summary before making your next move.
|Borrowing options||Unsecured personal loan, credit card|
|Loan terms||1 to 7 years|
|Can you borrow with bad credit?||Yes, but you may face higher interest rates|
|Can you apply online?||Quickly and easily at Aro|
|How quickly will you receive the loan?||Within a day of approval, in many cases|
|How do you repay the loan?||Over an agreed term of monthly repayments, with interest applied|