The increasing cost of living means that your salary does not stretch as far as it once did. Perhaps you have a deficit each month and need a financial boost to keep your finances ticking over.
Step forward the £2,000 loan! Accessing a £2,000 loan could provide an answer to your money worries, filling in the gaps to help pay your bills and expenses. However, committing to a loan can be daunting. So, where do you start?
In this article, we will look at the best £2,000 loans currently available, comparing the benefits of each type of loan so you can find the best £2,000 loan for your circumstances.
| Provider | Score | Details |
|---|---|---|
| 1. Drafty | ★★★★★ | Learn more |
| 2. Finio Loans | ★★★★★ | Learn more |
| 3. 118 118 Money | ★★★★★ | Learn more |
| 4. Iwoca | ★★★★★ | Learn more |
| 5. Amigo Loans | ★★★★★ | Learn more |
What Is a £2,000 Loan?
A £2,000 loan involves borrowing £2,000 over a period of time, paying back the original amount borrowed as well as the agreed interest.
Loans of this value are usually unsecured. An unsecured loan is a personal loan that is not secured on an asset, such as a house. If you do not pay back an unsecured loan, the lender cannot take possession of your property and will follow other proceedings to ensure that you pay back the money owed.
Conversely, a secured loan is secured on an asset, such as your home, and may be called a homeowner loan. If you default on a secured loan, your home could be repossessed. Typically, secured loans are much larger than £2,000, however.
How Much Will a £2,000 Loan Cost?
A £2,000 loan will cost you more than the original £2,000 borrowed as you will usually pay interest to the lender. However, the exact amount you will pay will vary according to the lender, your credit history, and the terms of the loan.
You will pay more interest back on a £2,000 loan when you have agreed to a higher APR or Annual Percentage Rate. The higher the loan APR, the more money you will pay to the lender in addition to the original amount borrowed.
You could find that the current APR offered by lenders has increased dramatically due to the Bank of England’s bank rate rise.
As of September 2023, the Bank of England bank rate has reached 5.25%, impacting your own finances, particularly when looking for a £2,000 loan.
What Types of £2,000 Loan Are Available?
If you are looking to borrow £2,000, you have several options available to you.
Unsecured Loan
An unsecured loan is a personal loan that is not secured against an asset, such as a house. Secured loans usually consist of several thousand pounds and may be paid back across loan terms of up to 5 years.
You could borrow money with an unsecured loan to cover a shortfall when paying bills, to pay for a holiday, or to cover home improvement costs.
Secured Loan
A secured loan is secured against an asset, such as a house. If you do not pay back the loan repayments on a secured loan, your home could get repossessed. Secured loans are usually financed at much higher amounts and could be paid back over 10 to 20 years.
You could borrow money with a secured loan to pay for home renovations or an extension.
Credit Cards
Credit cards are another option when you need to borrow £2,000, although the lender will set a credit limit. Some credit cards might offer you 0% interest on purchases for a set amount of time, such as 6 months, however. This would save you money on interest over this period.
You could borrow money using a credit card if you need to make purchases,
Debt Consolidation Loans
If you have any existing debts and need to rearrange your finances, a debt consolidation loan could be the best choice for you. Debt consolidation loans pay off all of your existing debts to leave you with one monthly repayment and one interest rate.
You will pay less back each month in debt repayments with one instalment and one interest rate so you can begin to build your credit score again.
Guarantor Loans
If you are not accepted for a £2,000 loan, you could try a guarantor loan. A guarantor loan requires support from a third party who has a good credit history and who is willing to be responsible for your debt if you fail to make the repayments.
Line of Credit
Fast becoming a popular loan choice, a line of credit acts like an overdraft. You will be approved a credit limit by the lender, yet you will only be charged interest on the money you have used from your account.
Interest is charged daily and you can pay back the money you have borrowed as fast as you like. The line of credit can be reused time and time again.
At a Glance, £2,000 Loans Pros and Cons
Check out this section for a quick overview of the pros and cons of £2,000 loans:
| Pros | Cons |
|---|---|
| ✔️ Fast cash — £2,000 loans provide you with fast cash as and when you need it. | ❌️ Debt — increasing your debt level can lead to unmanageable finances in the future. |
| ✔️ Soft credit searches — most lenders will provide a soft credit search, meaning that your credit score is not affected negatively when applying for a £2,000 loan. | ❌️ Interest — paying interest on your loan will mean that you are paying back more than you originally borrowed. |
| ✔️ Options — £2,000 loans come with many choices for you to consider. Do you want a secured or unsecured loan, a guarantor loan or a line of credit? | ❌️ Credit score — if you do not pay back the money you have borrowed, your credit score will be negatively impacted. |
| ✔️ Flexible loan terms — depending on the loan you choose, you could obtain loan terms of 1 year to 5 years, or even repay your loan in days or weeks without early repayment charges. | ❌️ Affordability — if your costs rise further or your salary decreases, you could find that you can no longer afford your repayments. |
Best £2,000 Loans — Reviews
A loan for £2,000 can be a lifeline to many, whether that is for debt consolidation to deal with existing debt or a personal loan for a luxury purchase. But, which £2,000 loans are best for you and your circumstances?
Here is our review of the best £2,000 loans currently available from the top lenders as we compare £2,000 loans:
1. Drafty — Best for Line of Credit
- Line of credit loan facility.
- No additional fees or late charges.
- Must be aged 18 years old or over.
- Monthly earnings should reach at least £1,250.
- Must be a UK resident with a bank account.
- Pay interest on the money used.
- Reuse your line of credit when required.
- Receive the money in seconds.
- Representative 96.2% APR (variable).
- Pay 19p per day for every £100 borrowed.
Representative example — when borrowing £2,000, you will pay 19p per day on every £100 borrowed. This totals £114 payable in interest each month. You will repay the amount you have borrowed from your line of credit whenever you can but should pay the loan early.
Drafty offers a line of credit that can be reused again and again. This is a loan alternative that could be easier to apply for and easier to manage. There are zero additional fees to pay.
To apply for this £2,000 loan, you must be aged 18 years old or over and you must be a UK resident. In addition, it is important that you have an active bank account and that you earn at least £1,250 per month from your employment.
When you apply for a £2,000 loan from Drafty, you will be approved for a credit limit. However, you will only be charged interest once you have withdrawn money from the line of credit.
However, this type of loan is unique. Once you have paid back the money you have borrowed, you can reuse this line of credit time and time again. The line of credit will be there for you when you need a cash boost.
However, you must ensure that you pay your repayments on time. Whilst Drafty will not charge you a late fee, the interest will be accumulated and will become difficult to manage.
The interest charged on a Drafty loan is 19p per day for every £100 borrowed. When borrowing £2,000, you will be charged £114 per month in monthly repayments for interest on top of repaying the money you have borrowed.
2. Finio Loans — Best for Bad Credit
- Good loan for bad credit scores.
- Borrow from £500 up to £5,000.
- Loan terms from 12 months to 36 months.
- Representative 39.9% APR.
Representative example — when borrowing £2,000 over 24 months, you will pay £116.07 each month. The total you will pay back after 24 months equals £2,785.68 with 39.9% Representative APR.
Finio Loans are a good choice in £2,000 loans for people with bad credit scores. You could secure a £2,000 loan despite a poor credit rating as Finio Loans considers your current position over your past indiscretions.
Finio Loans offer loans from £500 to £5,000 across terms of 12 months to 36 months, with a typical 39.9% APR Representative.
You could borrow £2,000 over 24 months with monthly repayments of £116.07. The total you will pay at the end of the loan will total £2,785.68.
3. 118 118 Money Loan — Best Rated Loan
- Borrow from £1,000 to £5,000.
- Loan terms from 12 months to 36 months.
- No impact on credit score when assessing eligibility.
- Representative 49.9% APR.
- Rated 4.8 out of 5 on Trustpilot.
Representative example — when borrowing £2,000 for 24 months, you will pay £123.64 in monthly repayments. The total payable once the loan payments have been completed will be £2,967.43, representative 49.9% APR.
The 118 118 Money loan is a good option if you are looking for a loan recommended by other customers. Rated 4.8 out of 5 on Trustpilot, this loan from 118 118 Money is recommended as a quick and easy loan along with excellent service.
You can borrow any sum from £1,000 to £5,000, depending on your credit history and eligibility rating. Spread costs from 12 months to 36 months to suit your own needs and circumstances.
To apply for the 118 118 Money loan, simply check your eligibility online without impacting your credit score.
If you are accepted and you would like to proceed with the loan, sign the documentation and set up a Direct Debit. Once all steps have been completed, you could receive your cash within as little as 15 minutes, depending on your bank.
4. Iwoca Flexi-Loan — Best for Business Loans
- Business loans for new and existing businesses.
- Borrow between £1,000 to £500,000.
- Repayment terms of 1 day to 24 months.
- Personal guarantee required.
- Interest charged at 3.33% every 30 days.
- No early repayment fees.
Representative example — when borrowing £2,000 for 24 months, you will pay £122 pin monthly repayments for the duration of the loan. The total repayment of the loan is £2,936. However, you can pay back this loan faster to reduce the amount of interest you must pay.
The Iwoca Flexi-Loan is a business loan with a difference. You can borrow between £1,000 to £500,000, whether your business is new or existing.
However, you will receive your cash as a business line of credit. This means that you will be approved for a credit limit and then you can withdraw sums of money as and when you need it. Perhaps you need to pay for stock in advance, or finance a new project?
To apply for this loan, you will need a personal guarantee, although the loan is not secured against any asset.
Repayment terms can be agreed from 1 day to 24 months, allowing you to pay back the money borrowed much earlier without any early repayment fees.
Interest is charged at 3.33% every 30 days. For example, you could borrow £2,000 over 24 months and pay £122 in monthly repayments, with a total of £2,936 payable. However, paying back your loan sooner will reduce the amount of interest paid.
5. Amigo Guarantor Loans — Best for Guarantor Loans
- Borrow up to £10,000.
- Loan terms up to 5 years.
- Guarantor must be aged 23 years or over.
- Guarantor must be a UK homeowner or have a great credit history.
- Representative 49.9% APR.
Representative example — when borrowing £2,000 over 24 months with a representative 49.9% APR (variable), you will pay £123.63 in monthly repayments. Over the entire loan, you will pay a total of £2,967.12.
The guarantor loan from Amigo Loans is the perfect loan choice if your credit rating is not great, yet a friend or family member will support your loan application.
Guarantor loans work to provide an additional finance option for individuals who cannot traditionally secure a loan. A guarantor will support your loan application on the understanding that if you default on loan repayments, they will be responsible for the debt.
The criteria for a guarantor will vary from lender to lender, although Amigo Loans require a guarantor to be aged at least 23 years old and to be a UK homeowner or possess a superb credit score.
You could borrow an amount up to £10,000 with an Amigo Loan, with loan terms stretching up to 5 years to suit your needs.
For example, you could borrow £2,000 for 24 months and pay £123.63 in monthly repayments, paying a total amount of £2,967.12 back to the lender at the end of the loan.
Leading £2,000 Loans for You: The Verdict
Whatever type of £2,000 loan you are searching for, our review has the perfect option for you. If you would like a line of credit to use as and when you require it, the Drafty loan is the best choice.
Acting similarly to an overdraft, a Drafty loan can be accessed up to the approved credit limit, with interest charged each day.
Or, if you have a bad credit score, Finio Loans could approve your application. Valuing current affordability over past indiscretions, Finio Loans could offer you a £2,000 loan with reasonable interest rates.
However, if you cannot access a £2,000 loan independently, Amigo Loans offers guarantor loans to help you access the finance you need.
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