Compare our best £5,000 loan deals

Personal, or unsecured, loans are paid back on a fixed schedule over anything from 12 months to 5 years. Some banks will let you have an even longer term.

The cheapest rates go to people with the best credit scores - but bad-credit personal loans are available too.

As the name implies, the loan is tied to you and your credit score - so you're not putting any assets at risk if you miss payments.

However, missing payments or defaulting on your loan will at the very least hurt your credit score and could result in county court judgements against you or your debts being passed to a debt collection agency. You may also have to pay late fees and charges.

If you're looking to buy something specific - you could borrow £5,000 on a credit card to do it. In fact, with a 0% purchase credit card, you could then spread the cost of this interest-free.

Even if you just need the money paid straight into your bank account, this is possible with a money transfer credit card, although there will usually be a fee attached.

Credit cards let you pay back your loan far more flexibly than a personal loan - with a low monthly minimum repayment and any amount over that allowed. You can even flex the amount you pay back each month.

If you pay back the full loan within the 0% period, you’ll save a packet on interest. However, if you still owe money at the end of the introductory period, you’ll be switched to an expensive APR, which will cost you a lot more. You may be able to switch to another 0% deal, but this isn’t guaranteed, so you should set your repayments to clear the whole debt before the 0% period ends. 

You will need a good credit score to take out the best cards, including 0% offers, and you usually won't know your credit limit until after you've been accepted for a card.

Missing payments or defaulting on your debt will result in a lower credit score and potentially county court judgements against you or even bankruptcy.

If you're a homeowner or have another valuable asset, you could get a cheap loan by putting it up as collateral.

Secured loans are available over much longer terms than personal loans - you can repay over as long as 30 years - and can be easier to take out as lenders have more certainty in the case that you default.

However, the money can take longer to reach you - as the lender needs to assess your collateral - and your possession is at risk if you don't meet repayments.

A guarantor loan could be an option if you have a poor credit history or are struggling to get a loan.

With these you need a third party – typically a family member or friend – to “guarantee” to pay off the debt if you can’t.

Other than that, they work the same way as a personal loan - with a fixed interest rate, set monthly payments and typical terms of between one and five years – although some may be longer.