Don’t be tempted by:
Loan Sharks/Door step lenders
Loan sharks are unlicensed money-lenders and should be avoided when looking for a loan.
However, if you have already borrowed money from a loan shark and are now experiencing problems such as threats and violence, you can visit Gov.UK to report them.
You can find out more on loan sharks and to speak to someone in confidence through the Citizens Advice Bureau.
Pay day loans
Pay-day loans are a quick way of getting small sums of cash quickly. There are many websites and TV campaigns to tempted you to sign up.
But, many offer quite a high interest rate which may mean you're paying back a lot more than you originally borrowed!
High Street lenders
Many high street stores offer personal loans and credit cards. However, if you do apply for a credit card be aware of the high APR (annual percentage rate). APR is a charge added as a percentage to the amount your borrowing.
If you do plan to borrow on a credit card, then make sure you pay it off quickly or you could be straddling debt for a long time.
Log Book Loans
Logbook loans are loans secured on your vehicle, so the lender owns your vehicle until you pay the loan back. You can keep on using your vehicle as long as you repay the loan. However, they are expensive and risky and you should avoid them if you can.
These loans are usually aimed at people who are struggling to get a more traditional loan because of a poor credit history. Almost anyone can act as your guarantor, as long as they are not financially linked to you, for example your wife or husband. A guarantor could be a family member, friend or even work colleague.
If you default on the loan, or fail to keep up with payments, the lender will ask your guarantor to cough up.
They will also chase you for the remainder of the loan plus any interest, and in some instances may take both you and your guarantor to court.
Being a guarantor is risky, so if you are considering this route make sure you know exactly what the implications are.