How much can I borrow with a personal loan?

Individual at desk with calculator doing calculations

How much can I borrow with a personal loan?

When it comes to borrowing money, the amount you want to take out in the form of a personal loan, the amount you should apply for, and the amount you can borrow are often different. You might have a specific sum in mind when applying for a loan, but you might find out that you don't qualify for that amount. On the other hand, you might want to borrow a certain amount to cover a project, but later realise that you can't afford the required repayments. This guide aims to assist you in finding the right balance between what you hope to borrow and what you can realistically borrow.

What is a personal loan?

A personal loan is when you borrow a lump sum of money from a lender like a bank or credit union to cover a significant expense, often an unexpected one. You then have to pay back this loan in regular instalments, typically monthly, over a fixed period.


In the case of personal loans, including payday loans, you agree to pay interest to the lender. The amount of interest can differ based on factors like the loan amount, repayment terms, and your individual situation.

What is an unsecured personal loan?

An unsecured personal loan is essentially the same as a personal loan. The term 'unsecured' just means that you’re not obligated to provide your home or any other assets as collateral to the lender if you’re unable to repay the loan. In contrast, 'secured loans' require you to pledge some form of security, usually your property, which the lender can seize if you fail to repay the borrowed amount.

How many personal loans can you have at once?

There isn't a strict limit on the number of personal loans you can have simultaneously. You can take out multiple loans from the same lender (depending on their criteria) or get loans from different lenders. However, it's generally not recommended.

Managing numerous payments at the same time can lead to a cycle of debt. Additionally, whether a lender decides to lend to you can depend on their policies, and they may be cautious if they see that you already have multiple personal loans.

Personal loans – how much can I borrow?

When borrowing money, you can borrow as much as the lender allows. However, it's generally advisable to borrow as little as necessary. Larger loans mean higher interest payments, and it takes longer to pay off the debt. Therefore, keeping the loan amount to a minimum helps you manage your borrowing better. It also safeguards your credit rating, as missed repayments can negatively impact it.

How to get a personal loan?

There are several things you need to consider carefully when deciding how much to apply for when taking out a loan. Ask yourself:


  • What’s the minimum I need to borrow to fulfil my needs?

  • How much can I afford to repay each month?

  • Do I have a strong credit score?

  • Have I struggled with repaying debt in the past and if so, why?

  • Do I have other debt I need to service?

  • Do I have a steady income?

  • Do I have a secure income?

  • What would happen if I lost my income? Would I still be able to meet my repayments?


Getting this right will mean gaining access to the money you need to meet your requirements, without taking on a financial responsibility that you can’t afford.

What is the minimum amount of credit you need to borrow?

Before approaching any lenders, carefully consider the amount of money you truly need to borrow. Explore alternative sources like friends and family, which may not involve interest and charges, helping bridge the gap between what you want to purchase and need to borrow.


Taking steps to minimise borrowing is generally wise. For instance, if you're using a loan for a renovation project, covering part of it with your regular income reduces the amount you need to borrow. If you can wait until your next payday to fix your washing machine and borrow only a small short term loan to cover the remaining costs, you can save money by reducing interest payments.

How much money can you afford to repay on a loan each month?

Next, think about how much you can afford to repay each month. The best way to do this is to look at your monthly spending and figure out where you can cut back or how much you have ‘spare’ to cover repayments. If you struggle to make ends meet each month, how are you going to find the money for repayments without getting yourself into even more financial trouble?

What happens if you don't pay back a personal loan in the UK?

If you fail to pay back the full personal loan repayments required by the lender each month - known as defaulting - you will receive a default notice indicating that you may be given additional charges or interest. Your missed payments may also be reported to credit reference agencies, which can negatively impact your credit score.

Struggling with the cost of living? Help is available without borrowing

Borrowing to cover regular weekly or monthly expenses is never a good idea. However, if you’ve found yourself in a bad cycle of borrowing, check out Citizens Advice which can advise you on any benefits you might be entitled to, but aren’t yet receiving.

There is also advice available through the Trussell Trust on local food bank projects that could help you reduce your financial burden by providing you with some basic food and groceries.

The above sources of information can also be worth considering if you have a poor credit rating and can’t get a loan to cover your essential costs.

For those who can afford to take out a loan, and are doing so for sound reasons, it’s time to take a careful look at your outgoings and financial responsibilities to help you work out what you can afford to repay.

Before you apply for loans or get credit, consider these costs

Here’s a list of some of regular costs you might be making and need to consider when deciding how much you can afford to put towards debt repayment:

  • Other debts you need to repay

  • Interest charges on those debts/credit cards/overdrafts

  • Vehicle costs

  • Utility bills

  • Council tax

  • Mortgage repayments

  • Travel costs

  • Food and grocery costs

  • School costs

  • Insurance

  • Subscriptions

  • Media and Internet costs

  • Phone costs

If you’re thinking about taking out a short-term loan to cover an emergency cost over a few months, think about where you can make savings in your regular payments to ensure you meet your repayments. You may need to make savings on non-essentials such as clothes, media, and phone costs for a short while.

What level of loan value does your lender offer?

Once you have calculated how much you need to borrow and how much you can afford to repay each month, it’s time to find the right lender. Payday loan lenders tend to offer smaller loan amounts, usually up to around £1,000 or so. If you are keen to take on a longer-term loan, lenders may offer up to around £25,000 under the right circumstances.

Choose a lender that offers the type of loan that works for your needs and compare interest rates, charges and total amount repayable figures carefully.

How much are you likely to be offered through a personal loan?

Taking out a loan of the right value for your needs isn’t just about how much you apply for. It’s also about how much the lender is willing to offer you. This comes down to a range of factors, such as:

  • Your employment status

  • Your credit rating

  • Your credit history

  • Your homeowner status

  • Your income

  • Your age and nationality

If you have a strong credit rating and are employed with a steady income, you’re very likely to be offered the amount you apply for. However, if you’ve had problems with making repayments in the past, or if you’ve not taken out credit before, your credit rating may be low. This might mean lenders are less willing to offer you larger sums of money as you are seen as a higher-risk prospect. You may be able to get around this by applying for a guarantor loan, or even a secured loan if you are a homeowner - although this comes with additional risks.

Alternatively, you could try to improve your credit rating by taking out a small loan and making repayments in full and on time. This could improve your credit rating, making it easier to take out a larger loan on better terms later.

Representative Example: Borrow £400 for 4 months, 4 monthly repayments of £149.37. Total repayment £597.48, interest rate p.a. (fixed) 255.5%. Representative APR 939.5%.
Compare payday loans.


Warning: Late repayments can cause you serious money problems. For help, go to www.moneyhelper.org.uk.

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Representative Example: Borrow £400 for 4 months, 4 monthly repayments of £149.37. Total repayment £597.48, interest rate p.a. (fixed) 255.5%. Representative APR 939.5%.Compare Moneyboat loans.

Warning: Late repayments can cause you serious money problems. For help, go to www.moneyhelper.org.uk.

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