Option 1 - The Personal Loan
This would probably be the method most people choose. You can get a low rate - typically 6% to 15% APR depending on your credit rating. You can choose to borrow the money over 6 months to 5 years. You don't need to secure the money on your house and you can usually get the money in days.
Option 2 - The Secured Loan
This is very similar to a personal loan but secured on your house. This means if you can't afford to pay the loan back, the loan company can sell your house to get the money back you owe them. In reality this rarely happens, but it does mean that if you can get a personal loan, you should probably pick that option. Secured loans are usually better for people with a less than good credit rating, who may have been turned down for a personal loan. You can borrow money over 5 years to 25 years and the APR is usually only a little higher than with a personal loan.
Option 3 - The Remortgage
Add an extra £5000 onto your mortgage. A mortgage is the cheapest way to borrow money, but you must also consider how long you borrow the money over. Even if your mortgage only has 10 years left, you will pay more interest than you would by borrowing £5000 at a higher APR but only over 5 years.
In the end you must consider what is best for you - lower monthly repayments, or paying less interest overall. Your credit rating may have some say in the matter.
Tom_Wilkinson
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