Borrowing money

There may be times when you need to borrow money.
 With so many lending companies wanting to ‘help’ it can be confusing to find a loan right for you.

Our Money Matters Team can give free advice and refer you to a number of specialist advisers. 

Call us now on 0800 121 60 60

Lines are open Monday to Friday, 9am to 5pm.  If you want a call outside these hours, please leave a message and we will call you back. Or you can email us at


Good borrowing

Here are a few options to consider:


Do not be put off going to your bank for a loan.  Banks are regulated and you can speak to someone in person about your situation.

Banks can also provide overdrafts for some of their accounts. This can be a short term option but banks can apply an interest rate on your overdraft if it is not paid off and they can charge you if you use it without their permission

Credit Unions

Credit Unions can offer loans at a lower rate compared to online 'payday' organisations. They also offer saving accounts.

The rates they offer may differ or be more than those offered by high street bank. Find your Local Credit Union. 

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Bad borrowing

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.

Personal guarantees

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.

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Credit Score

Improve your credit score

There are a number of ways that you can improve your credit score. You should, for example, make sure that you are registered on the electoral roll and try to avoid frequent applications for credit as lenders are wary of borrowers that have previously been turned away.  It's also a good idea to make sure that your credit file is accurate and up to date.

MoneySupermarket's comparison service can help you find the right personal loan if you have no credit history or a bad credit record. The site compares personal from all the leading lenders, so that you can get the best deal for your circumstances.

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