There’s an abundance of lenders and products available and it’s important to choose wisely, with an appreciation of the immediate and longer-term implications. The wrong choice could prove unnecessarily costly, so read the earlier sections to help clarify your needs and understand the issues involved:
Before You Borrow…
Things to Consider
The Total Cost of Borrowing
This article provides a summary of the common types of borrowing, outlining interest rates (APR), repayment methods plus general pros and cons. For more information, see the separate sections on each type. Bear in mind this gives a general overview only and you need to do your own research and get independent, professional advice for your particular situation.
Research various borrowing options:
- Compare APR, overall cost and the repayment plans of relevant products, to see what best suits your needs and budget.
- Find out about each element of different packages and make sure you understand the terms and conditions, before you sign up for any deal.
- For small-scale short term borrowing, consider an overdraft or credit, whereas a personal loan may be a cheaper option for larger amounts over a longer period.
Overview of Borrowing Options
Relatively cheap borrowing with delayed repayments & write-off period
Find out more: Student Loan
Borrow a fixed sum & pay it back with interest, over a fixed length of time
Find out more: Personal Loan
Bank authorises you to take out more money than you have in your account, up to an agreed limit or time period – acts like a safety net
Find out more: Overdraft
Purchase now & pay later
Find out more: Credit
Loan to tide you over to your next payday: only small amounts (e.g. £1000 maximum) for very short periods
Find out more: Payday Loan
Credit Unions provide competitive loans and other financial services for their members; they may also provide a solution for people struggling with debt, or who are unable to borrow from the usual institutions.
Find out more: Credit Unions
Find out more:
For more details about each type of borrowing see the separate sections:
How to repay & whether to clear your debt early if you have spare cash
Including Professional & Career Development Loans (PCDLs) & Graduate Loans
Tips for managing your overdraft
Credit cards, store cards & how to manage credit
Good-to-know info about payday loans
How they work & where to find a union you could join
How to Determine the Best Borrowing Option – Money Advice Service