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Ways to borrow

Understanding your choices

There are several ways to borrow money if you need it – understanding the options can help you decide what’s right for you.

Choosing the right option for you

Should you go for a loan or a credit card? When is an overdraft a good idea? Have you thought about borrowing more on your mortgage? Choose an option below to discover more or visit a branch if you need more information or want to talk about it further.

Credit cards

For spending, transfers or building your credit rating.

Loans

Thinking about making a large, one-off purchase?

Overdrafts

An authorised overdraft can be helpful in the short term, but straying beyond your agreed limit could mean higher fees and interest charges.

They're attached to your current account, and can be used for those day-to-day expenses, or to cover unexpected bills.

If you bank with us, you can calculate how much an overdraft could cost.

What's good about overdrafts

  • Your bank should make it clear exactly how much an overdraft could cost, so everything should be clear up front. Some banks offer fee-free buffers, where you can have a limited overdraft without being charged – but you should always check to make sure you understand when and how you'll be charged. Your bank can help if you're stuck
  • Depending on the lender, they're usually straightforward to apply for. If approved, you shouldn't have to wait too long to access your overdraft
  • They’re typically available from £100 to £5,000 – but again, this depends on your bank

What to consider

  • Always check the costs you could face for using your overdraft and if you go over your agreed limit. Different banks charge different fees, so it's a good idea to contact your bank to find out the exact costs
  • They can help in the short term, rather than being a long-term solution. If you're struggling financially, it's better to speak to your bank than to rely on your overdraft

Credit cards

You can use them for everyday spending, balance transfers, and to help you build your credit rating.

It’s important you understand the interest and fees that might be applied – have a look at the things you need to consider, below, before you apply.

There are many credit cards available. See if we have a card to suit your needs.

What's good about credit cards

  • They can be a short-term borrowing option to help you buy and spread the cost
  • Lots of credit cards offer 0% interest on purchases for a set amount of time. Rules apply and you should check these with your card provider
  • You can transfer balances, which could save you money, plus having a credit card can help build lenders' confidence in you, if you have a limited credit history
  • There are lots of credit cards available. It’s a good idea to explore the market and the different features, to find a card that suits you
  • Lots of credit card providers offer alerts, like getting a reminder that your payment is due, to help you manage your money

What to consider

  • They're usually an expensive way to fund your long-term financial needs
  • It’s best to pay off your balance quickly or in full each month – unless you have a promotional interest rate, like 0% interest on purchases, as interest will normally be charged on anything you buy. If you have a balance on a promotional interest rate you should pay it off before the period ends, or you’ll pay the standard interest rate on any balance left
  • Paying just, or close to, the minimum payment can be an expensive way to borrow and it might take you a long time to pay off your debt
  • Keep an eye on your spending habits and only borrow what you can afford to pay back
  • Depending on how you use and manage your card, interest and fees might be charged or added to your balance – make sure you know the potential costs, before you get a credit card
  • If you pay late or miss a payment, your credit score could be affected, which could make borrowing more difficult in the future. Going over your limit can have a similar impact
  • When you withdraw cash using your credit card, you’ll often incur fees and higher interest charges than if you make a purchase

Loans

Personal loans can be suitable to cover large, one-off purchases – like buying a car or making home improvements.

Loans are usually repayable in fixed monthly instalments by Direct Debit over an agreed period, and they often have fixed interest rates. People typically borrow between £1,000 and £25,000, but you could borrow less or more – depending on your needs and your lender.

If you’re thinking of getting a loan, why not explore your loan options with us? 

What's good about loans

  • You can use your loan for almost anything, but different lenders will have different restrictions1
  • They can help you budget or combine your other debts into structured, manageable payments
  • They are a longer-term borrowing option – you can often choose a loan term to suit you

What to consider

  • If you miss the repayments, you might be charged a fee
  • Getting a price quote from some lenders could impact your credit score
  • If you want to pay your loan off early, you might be charged early settlement fees

Borrowing more against your home

If you already have a mortgage, you could speak to your lender about additional borrowing – you could then use this extra money for home improvements or a special purchase.

There's lots of things to think about with this option. If you have a mortgage with us, we'd recommend reading our guide to additional mortgage borrowing.

What’s good about borrowing more against your home

  • You might be able to pay off the additional borrowing sooner than your original mortgage term
  • You might be able to borrow the additional amount over a longer period than with a personal loan

What to consider

  • You need to work out the total cost carefully – you may get a lower interest rate than a loan but it could cost you more if you repay over a longer period
  • There might be a minimum limit for extra borrowing – and that might not suit your needs
  • Your home will be at risk if you’re unable to afford the new payments

Our expert mortgage advisers will help you find the right option with us, to suit your circumstances.

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