What does it cost to borrow £20,000?

2 min read

Pounds, not %How to compare quotes

≈ £1,206/monthIllustrative: 10.5% × 18 months

≈ £334 saved10.5% vs 12.5% in the example

NegotiableRate, fees and term usually are

What separates two £20,000 quotes

By £20,000 you'll usually have more than one credible offer, and the useful comparison is in pounds over the life of the deal. Take two quotes for the same 18-month facility: at 12.5% the illustrative interest is about £2,037; at 10.5% it's about £1,704. The two-point gap is worth over £330 — real money, but invisible if you only glance at the percentages. Lay both offers side by side properly using this method for comparing two offers, including every fee each lender charges.

£20,000 in real numbers

The illustrative base case: £20,000 on a reducing balance at 10.5% over 18 months is about £1,206 a month, roughly £21,704 repaid in total — call it £1,704 of interest. It's also worth asking whether the quoted rate is fixed for the term, because a variable price changes this arithmetic mid-loan; see whether your rate can move. These figures are illustrative — your rate depends on your company's accounts, commitments and time trading.

Negotiating and switching

An offer at this size is an opening position, not a verdict: rate, fee and term can all move, especially with a competing quote in hand — see negotiating a loan offer. And if you plan to clear the loan early when a strong quarter lands, check the early repayment charge position first, since it changes which offer is genuinely cheapest. Run the pound-for-pound comparison on the true cost calculator, and price £20,000 with Credicorp to get a live figure to negotiate around.

Frequently asked questions

How much difference does the rate really make on £20,000?

In the illustration, two percentage points over 18 months is worth about £334. Stretch the same gap over three years and it multiplies. That's why the discipline is to convert every quote into total repayable — the pound figure makes rate gaps concrete and instantly comparable in a way percentages never are.

Can I haggle on a £20,000 business loan offer?

Usually, yes. Rate, arrangement fee and term all have room at this size, particularly if you can show a competing offer or strengthen the application with security or fuller accounts. The lender's first quote prices their uncertainty; anything that reduces that uncertainty is a lever. The worst outcome of asking is the original offer standing.