What's the best way to borrow money?

At times, we all have extra expenses and need some additional money. Our advice will help you choose the best ways to borrow money.

Loan sharks

A ‘Loan Shark’ is someone who lends money illegally, without a licence. Often loan sharks don’t give out any paperwork and you have no way of knowing how much you will be expected to pay back. Threats and intimidation may be used.

The Illegal Money Lending Team can help anyone who is having problems. Contact them on 0300 555 2222, 24 hours a day, seven days a week, 365 days a year.

You can find more tips on how to deal with Borrowing on the doorstep here.

Door Step Lenders Doorstep lenders, also known as home credit providers, are companies who employ agents to visit you in your home to offer loans and collect payments. Doorstep lenders are registered with the Office of Fair Trading and are legal. In order to keep their licence, they need to comply with a number of conditions. You should look around before taking out this sort of loan, as the interest rate is very high. Other money lenders Other money lenders advertise on television, radio, newspapers and on the High Street. Many offer a number of services, including loans, cheque cash facilities and credit cards. The interest rates they charge tend to be much higher than you would pay at a bank. Store cards Many shops offer store cards. Others encourage you to enter into an agreement to make weekly payments. Sometimes paying in this way, particularly for larger household items, makes good sense. But you should always check first how much interest you will be charged and the total amount you will end up paying. Some companies charge very high interest rates. Further advice is available at the Consumer Direct website

Credit Unions

Credit Union Loans are a good way to borrow small or medium amounts of money. The interest rate is very reasonable and our advice would be to consider these loans as an alternative to any doorstep lender.

You can find more information on the Sheffield Credit Union website

Banks and Building Societies

High Street lenders, including banks and building societies, probably still offer the best deals and interest rates for borrowers. If you have a bank account, you may find the initial setting up of a loan a lot easier.

But make sure you take time to look around, as the offers available to existing and new customers do vary.