Small Loans

Written by Alice, Editor · Reviewed by Stephen, Compliance

Small loans are short-term personal loans for amounts from £100 to around £1,500, repaid in equal monthly instalments, usually over 3 to 12 months. Pounds4U is a free credit broker: you complete one short form and we look for an FCA-authorised lender that may be able to lend to you.

Why borrow a small amount?

Borrowing only what you need keeps the cost down and makes the loan easier to repay. A smaller loan is also easier to be approved for, because the monthly repayment takes up less of your budget.

Common reasons include a car repair, a broken appliance, school uniform or a school trip, or a bill that’s due before payday.

How much will a small loan cost?

The cost depends on the amount, the term and the rate the lender offers you. Short-term loans are capped by the FCA: interest and fees can’t be more than 0.8% of the amount borrowed per day, late payment fees are capped at £15, and you’ll never pay back more than twice the amount you borrowed.

Representative example: borrowing £750 over 12 months at £77.29 a month, you would repay £927.48 in total, including £177.48 interest. Interest rate 49.9% a year (variable). Representative 49.9% APR (variable).

Choosing the right term

• Shorter term: higher monthly payments, but less interest overall.
• Longer term: lower monthly payments, but more interest overall.

Pick the shortest term with a monthly payment you can comfortably afford. You can repay early and save interest if your circumstances improve.

What you need to apply

• To be 18 or over and live in the UK
• A UK bank account and debit card
• A regular income
• A mobile phone number and email address

Applying with a low credit score

Lenders on our panel consider all credit histories and focus on what you can afford now. A past missed payment or default won’t necessarily stop you being approved, though no lender can guarantee a loan.

Frequently asked questions

What’s the smallest loan I can get?

You can apply for as little as £100. Larger amounts, up to £10,000, are repaid over longer terms of up to 36 months.

How fast will I get the money?

If you’re approved and sign your agreement on a working day, many lenders pay within hours.

Does Pounds4U charge a fee?

No. Our service is free. We’re a credit broker, not a lender, and lenders may pay us a commission.

Will applying affect my credit score?

Lenders usually start with a soft search, which doesn’t affect your score. If you accept an offer, the lender may run a hard search, which other lenders can see.

Warning: late repayment can cause you serious money problems. For free, confidential help, go to MoneyHelper.