Why it’s important to think about how much you need
How much you need to borrow will help determine where you find that extra injection of cash and when it comes to how much you can actually borrow, well, much of that will depend on your own credit history.
So first things first – if you only need to borrow a small amount of money , consider your overdraft facility if you have one. If not then it could be worth looking around at different current accounts, with many banks offering better interest rates than on a loan or even interest free overdrafts if you switch.
Alternatively, credit cards with zero interest on purchases could be worth a look if you need to buy items (rather than need the actual cash). As long as you pay back what you owe within the interest free period (along with making the minimum monthly payments on time), then you can be smug in the knowledge that the credit hasn’t cost you a single penny extra.
But if you need a larger sum of money then a personal loan could be the answer. You can usually opt to borrow a minimum of £1,000 with upper limits depending on the lender – some will loan out up to £50,000, but most around £25,000. The best APRs (annual percentage rate, which is the amount of interest plus any automatic fees you pay on top of your loan) are reserved for the customers with the best credit ratings, which is why when you apply for a loan, you need to be aware that the APR you see, might not be the one you get.