Some of the options available to borrow money
Credit card
Good idea if you pay your bill in full each month.
Interest rates are quite high and if you are late with a payment fees can be prohibitive and it's very easy if your credit limit is raised to a high figure to get into bad debt
Personal loan
Personal loans can be a sensible way to borrow a substantial sum over one to five years.
But due to using no security the rate for unsecured personal loan will be higher than a secured loan.
Hire Purchase
Rates are quite high and you do not own the purchase until the loan is fully paid off
Bank Account Overdraft
Flexible for short term borrowing
Often include a fee on top of quite high Interest Rates
Store card
Some store cards charge a very high rate of interest, up to double the rate of other forms of credit
Interest free store credit
If you have the option then a great idea but remember if you are late with a payment or do not pay
off in the free interest period the charges and interest rates will wipe out any savings you may make
Home Shopping Catalogue
Some of the highest rates in the industry but if they are running a special offer with interest free
for a set period can be a great way to buy Xmas presents interest free
Secured loan
If you have built a high credit card debt or other loans or wish to buy a large ticket
item or home improvements is a sensible way to borrow as due to you providing security
for the loan the interest rates are lower ( If you don't keep up the repayments of any
loan secured on your home you could end up losing your home ).
How to Choose What is best for you
The options often depend on your credit rating and even with the same type of loan
you can get different rates from different companies so use a credit loan calculator to help we have provided a link to the BBC loan calculator at the bottom of the page
Also always read the small print on any agreement you sign and I would also advise checking the
company you are borrowing from is reputable
Check the Annual Percentage Rate (APR) on any loan offered and work out how much you will have to pay back in total over the lifetime of the loan before signing up. (The APR is a standard way of stating the cost of a loan, taking into account the interest and other charges, such as any arrangement fee. The higher the APR, the more expensive the loan.)
Good Money Management
Don’t ignore bills or financial problems because they won’t go away. If you don’t understand a bill or a letter, or if you are concerned about your finances talk to the CAB Citizens Advice Bureau before you get in to deep
Always remember to not get to the point where your out goings are higher than your incomings
by sticking to a budget
Below Are some of the sites and organisations to find further information
Trading standards
Citizens Advice Bureau
Financial Services Authority
Consumer Direct From DOT and Industry.
FSA Loan Calculator
National Debtline
