Following the credit crunch, many people have had second thoughts before borrowing money, and they’re also choosing to spend their loans paying off debts and keeping up with bills rather than on luxury holidays and expensive household items.
If you’re struggling to make ends meet or looking for a small cash injection to repair your car or pay for gas and electricity, there are a few avenues through which you can apply for finance. Before you do so, however, check to see if there are cheaper ways to borrow cash instead of going through the bank.
For example, borrowing from friends or relatives at reasonable interest rates should be your first port of call. These rates are likely to be lower than credit card rates, which, according to comparison sites in the UK, are at an average all-time high at 19.51 per cent as of March 2012. However, credit cards can be the cheapest way to borrow because their debt doesn’t accrue for up to 18 months, provided you pay it back in time.
Some banks allow you to transfer money into a new account for a certain fee, allowing you to consolidate your debt and pay it back without accruing too much interest. Another way to get a little bit of extra cash is to opt for a MoneySupermarket payday loan, although these loans are not designed for long-term borrowing. On the plus-side, it’s quick and easy to apply for these loans – even if you have bad credit history – and they can be a handy way to plug a gap in your budget provided you can repay the funds next month.
Don’t get stuck in a spiralling pattern of debt: opt for credit card loans, overdrafts or payday loans to make ends meet, but remember to fully research options and read frequently asked questions to ensure you don’t exacerbate your money problems.