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Best ways to borrow a small amount of money

The best way to borrow money depends on how much you need to borrow and how long you need to pay it back. While there are lots of ways to borrow a small amount of money – e.g. £500 to £2,000 – the right one for you will depend on your financial circumstances, including your credit score and how much debt you already have. This guide takes you through the main options, highlighting the pros and cons of each approach.

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Borrowing a small amount
There are lots of ways to borrow a small amount of money, but the right one for you will depend on your financial circumstances, including your credit score and how much debt you already have.

Different ways to borrow money

Whether you need to cover the cost of repairing your boiler or want to take advantage of a great deal on next year’s holiday, the most popular ways to borrow a small amount of money include personal loans, credit cards, and current account overdrafts:

Personal loans

You can take out personal loans for as little as £1,000 (and sometimes even £500). This type of borrowing offers speedy access to the cash you need in return for regular monthly repayments over the course of a year or more. But beware – interest rates are often higher for small amounts, particularly if you have an imperfect credit record.


  • Can be arranged quickly – you can often have the cash within a couple of days

  • Come with fixed monthly repayments that can help with budgeting

  • Can be a cheap option if you have a good credit score


  • May not be available for amounts below £1,000

  • Interest rates tend to be higher for small amounts

  • May involve extra fees – such as early repayment charges – that can make small loans more expensive

Compare personal loans

Compare a range of loans from personal loans to debt consolidation loans.

Credit cards

A credit card can be a great way to borrow a small amount of money, especially if you can qualify for a card offering 0% on purchases, which can help spread the cost of a big outlay, or one offering 0% on balance transfers if your aim is to consolidate and pay off your existing debts.


  • Can offer a cheap – or even free – way to spread the cost of a big purchase

  • Could improve your credit score when used responsibly

  • Can make it cheaper and easier to pay off your debts


  • 0% deals only last for a pre-determined period – after that, the interest rate will shoot up

  • They can encourage further borrowing if not managed carefully

  • Penalty fees may apply if you go over your credit limit or miss a (minimum) payment

Compare 0% purchase cards

Find a credit card with an interest free period for purchases.


You may find an arranged overdraft facility on your current account the simplest way to borrow a small amount of money. However, the high cost involved means overdrafts are only suitable for very short-term borrowing.


  • Offer quick and easy access to emergency cash

  • May offer interest-free borrowing for small amounts (over a limited period)

  • Are easy to set up if you have a current account


  • Generally charge very high interest rates of 30% plus

  • Only offer access to limited funds - e.g. up to £1,000 (depending on your bank)

  • Charge you even more if you exceed your arranged overdraft limit

Other ways to borrow a small amount

Alternative options worth considering when looking to borrow a small amount include:

  • Asking family or friends for a short-term loan

  • Checking out the deals available via peer-to-peer lenders 

  • Taking out a specialist debt consolidation loan (if paying off debt is your goal)

You should avoid these borrowing options:

  • Payday loans, which tend to be very expensive, even over a short term

  • Secured loans, which are designed for people looking to borrow larger amounts

Compare peer to peer loans

Compare a number of peer to peer and other personal loans on our comparison table.

How to compare low-interest loans

It’s quick and easy to compare loans using the Uswitch personal loans comparison service. 

Just tell us how much you want to borrow and over what term, plus a bit about you and your finances, and we'll check your eligibility for our top deals and provide a list of the best ones you’re likely to qualify for – all without affecting your credit score.


Can I get an interest-free personal loan?

No, all personal loans from banks and other lenders charge interest. To borrow a small amount of money interest free, you need to look at 0% credit cards and – where available – 0% overdraft buffers. Remember, though, that high interest rates will kick in on both credit cards and overdrafts if you exceed the 0% period or amount. 

What is a good loan interest rate?

A good loan interest rate for you will depend on various factors, including your credit score and how much you need to borrow. For example, if you have an excellent credit record and want to borrow £5,000, you might be offered a three-year loan at 7.5%. But if you only want to borrow £1,000, the best rates will often be almost double that at 14%. And if you have a low credit score, a good loan rate will be higher still – especially if you only want to borrow a small amount.