The true cost of borrowing £10,000 depends on the instrument

A borrower of £10,000 can pay either £1,800 or over £8,000 in interest over five years, depending on the instrument used. Using a credit card for this amount is typically one of the most expensive ways to borrow. At an APR of 30-36%, the interest costs can exceed £8,000. In contrast, a personal loan at roughly 7-8% interest would result in total interest payments in the region of £1,800 to £2,200. Mainstream lenders currently offer rates in the 6-10% APR range for strong borrowers, with TSB offering 5.6% APR for loans between £7,500 and £25,000. The choice of borrowing instrument determines the final interest cost.