£100,000 loan guide: How to borrow 100,000 pounds

The Freedom Finance £100,000 Loan Guide: How to borrow 100,000 pounds

Are you looking to borrow 100000 pounds, perhaps to make some renovations to your home, to purchase the freehold of your building, or to consolidate existing debts?

Borrowing a large amount of money is a big decision with a lot to consider, but it doesn’t need to be stressful or intimidating.

Whatever your reasons for borrowing, we’re here to guide you through the process with our complete guide to £100,000 loans.

What are my options for borrowing £100,000?

For amounts as high as this, options like unsecured personal loans and credit cards aren’t applicable as their limits are lower than the amount you hope to borrow.

Generally speaking, you will be looking to acquire £100,000 through one of the following methods:

Homeowner loans

Secured loans for homeowners that tie the debt to your house. By securing the loan against your property, lenders will be more willing to offer higher amounts over longer periods of time.

  • Borrow amounts from £5,000 to £500,000+
  • Terms of 1-30 years
  • Can be used for any loan purpose
  • Don’t need to remortgage
  • Receive advice on your best loan option
  • Available to homeowners only

Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

Remortgaging to release equity in your property

If your home has gone up in value since you bought it and you’ve come to the end of a fixed mortgage period, then remortgaging is an alternative approach that doesn’t require you to take out a personal loan.

When you remortgage, you’re essentially borrowing more against your property to access additional funds.

Some of the benefits of remortgaging include:

  • You’ll still just have one mortgage to manage
  • You can potentially borrow large sums of money, depending on your property value
  • Potential to spread the cost over long repayment terms

Some of the main considerations to keep in mind when thinking about remortgaging:

  • You’re borrowing a larger amount against your home, which means your monthly mortgage repayments will likely go up
  • If you increase the size of your mortgage by releasing equity and the value of your home falls, you could go into negative equity
  • If you’re in the middle of a fixed rate period, you may have a big early repayment charge

If you choose to remortgage, you’ll be taking on more debt. It’s therefore important to carefully consider whether it’s affordable in the long-term. If you’re not able to keep up with the new mortgage repayments, you could risk losing your home.

Where can I get a £100,000 loan?

If you’re looking to take out a secured personal loan, you will need to make an application to a loan provider.

With so many lenders out there, the task of sifting through the options can seem a little overwhelming. With our tools, we make this easy for you.

As a broker, we allow you to search and compare a variety of lenders, so you can find one that’s best for you.

To get started, simply head over to our eligibility checker and provide some basic information about your background and what you’re looking for. We’ll then help you browse and compare suitable lenders.

Am I eligible for a £100,000 loan?

In order to borrow £100,000, you will need to be a homeowner. Beyond this, your eligibility will depend on the criteria of the lender you’re applying to.

Common criteria that lenders will assess when you apply might include:

  • Your credit history or credit score
  • Your income
  • Your debt-to-income ratio (the amount that you already pay towards debts)
  • Loan purpose (such as debt consolidation, or making home improvements)

The easiest way to check whether you’re eligible is with our eligibility checker tool, which will suggest lenders based on your needs and circumstances.

Can I get a £100,000 loan with a bad credit score?

Your credit rating, or credit score, is a value based on your credit history. Lenders use this to assess your past borrowing and determine whether your loan application is eligible for approval.

A good credit score will indicate a history of reliable borrowing and repaying. If you already have a mortgage and have been consistently repaying it on-time, this will usually benefit your credit score. With a strong credit rating, lenders will be more likely to offer you the full amount and with more favourable terms.

A lower credit score, on the other hand, will often result in a less favourable offer from lenders. In some cases, it may even mean your application is not approved.

Borrowing as a homeowner with a low credit score

In general, secured loans are less reliant on your credit score alone. By securing the debt against your property, you are providing the lenders with additional assurance.

However, your credit score will still have an influence on the final terms of the loan that you are offered, so it’s important to keep this in mind.

Can I apply to borrow £100,000 online?

You can start the application process online by checking your eligibility for a secured loan and reviewing the lenders available.

Once you have decided on a lender, it’s time to make contact. Due to the increased complexity and higher value of secured homeowner loans, you will need to speak with someone as you go through the process of applying.

Once you have made your application, the lender will evaluate your eligibility based on the details you provide. If they approve it, they will be in touch with an offer, which will typically include the following:

  • The loan amount
  • The repayment term
  • Any additional fees or charges that you will need to be aware of
  • The total amount expected  to be paid at the end of the repayment term
  • The legalities regarding the loan being secured against your property

You should carefully read through these terms and consider whether they are inline with your expectations and your circumstances. If you are happy with the terms, you can accept the loan agreement and the funds will be paid into your account.

Will I receive my loan on the same day?

While it’s common for lower-value unsecured loans and credit cards to be approved and received on the same day, this isn’t the case with homeowner loans. Secured loans require additional paperwork, due to the fact that they are tied to your property, and take longer to be processed as a result.

A secured loan will typically require around 10 days to be processed, but it’s largely dependent on how quickly you send the required paperwork and required information.

At Aro, we help to speed up this process by using an app called Nivo, which allows you to send documents for many lenders quickly and securely online.

Can I afford to borrow £100,000?

By any measure, £100,000 is a lot of money. If you’re committing to borrow and then repay this amount plus interest, it’s crucial to be sure that you can afford to do so, particularly when the loan is secured against your home.

Your loan agreement will set out a repayment plan, or term, which you will then need to review and decide whether it’s affordable for you.

Consider your current monthly expenses like your mortgage, utilities and any existing loan or credit card repayments. Is the proposed monthly repayment amount comfortably and reliably within the amount of cash you have available each month, after any recurring monthly payments have come out?

If so, then this is generally a sign that you can afford the repayments living within your current means. But remember, things can change and your monthly income could suddenly drop for any number of reasons. It’s a good idea to think about what back-up sources of finance you have, to cover for any unexpected changes to your financial situation.

It helps to think about the long-term and make sure that you can afford to repay every month for the full duration of the loan. Any missed repayments might impact your credit score or lead to further action being taken by the lender.

If it’s looking like you will struggle to consistently make the monthly repayments, you could also consider a longer loan term. A longer repayment term would allow for more manageable monthly repayments, but would therefore require you to have paid a higher total amount at the end of the agreement.

What can I use my £100,000 loan for?

There are many use cases for loans of this size, like purchasing freehold or making improvements to your property.

Depending on what you plan to do with the money you borrow, there might be other things that you’ll need to think about.

To help with this, we’ve compiled additional information for some of the most common reasons for borrowing:

How do I repay the money I’ve borrowed?

Once you accept the loan and the money is paid into your account, you simply need to make the repayments according to the agreed schedule.

It can help to set-up an automated bank transfer, or standing order, to be paid monthly at a time that is financially convenient for you. This way you know that the money will come out each month, without any action required on your part. That’s one less thing to think about.

Once the debt has been fully repaid, along with any interest and other fees, the lender will contact you and confirm that the loan has been repaid.

Check your eligibility and start comparing £100,000 loans

Are you ready to borrow £100,000? Head over to our eligibility checker to see how much you’re able to borrow and find the right loan provider for your needs.

Learn how much you can borrow

Do you have a different amount in mind than the one above? Check out our Loan Amount Guides series below.

Loans up to £1,000£1,000-£9,999 Loans£10,000 Loans+
£100 Loans£1,000 Loans£10,000 Loans
£200 Loans£1,500 Loans£20,000 Loans
£300 Loans£2,000 Loans£50,000 Loans
£400 Loans£3,000 Loans£100,000 Loans
£500 Loans£5,000 Loans
£600 Loans

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