Do you need to borrow money?

Borrowing can help with unexpected costs but it’s important to choose the right type of credit and use it wisely.

It’s difficult to know which websites to trust when you have money issues.  Internet searches can lead you to organisations hoping to profit from your problems.  A website we recommend is the government’s free and impartial www.moneyhelper.org.uk.

Before you borrow

It’s a good idea to ask yourself the following before you borrow money;

·       Can you wait until you have saved enough money instead?

·       Can you afford the repayments?

·       If you tend to be impulsive when buying things, try giving yourself a cooling off period of at least two days. When you’ve had a chance to reconsider, you might change your mind.

If you’re struggling financially:

·       Check you’re claiming all the benefits you’re entitled to.

·       Look for ways to cut costs such as by switching energy, phone or internet provider or seek advice about extra sources of income and support from an advice centre or your local council website.

·       If you’re thinking about borrowing money to help pay your bills, you should consider getting free and impartial debt advice first.

If you decide to borrow money there are some important factors to consider

How much can you afford to repay? - Be realistic about how much you could repay each month, for example consider what might happen if your other expenses were to increase or your income dropped.

Choosing the right type of credit - The right type of credit or loan could mean you pay far less overall. When you’ve worked out what type of credit suits you, shop around and compare deals.

It’s important to compare:

• the interest rate and the annual percentage rate (APR)

• the total repayment amount

• any penalties for missed or late payments, or fees if you pay it back early

• the cost per week or month, and whether this might vary.

Beware high-cost credit

If you have a poor credit score, you might think about using a payday loan company. Before signing up for a payday loan or other type of high-cost borrowing, make sure you’ve explored all possible alternatives.

Avoid loan sharks

Loan sharks often target people online. This kind of lending is illegal, and it could cost you a lot more than you think.

If you’re struggling financially and considering borrowing money, please contact us and we can support you with a benefit check and/or signpost you to other sources of support.

PWCAC is OPEN for face-to-face advice (appointments and drop-ins) Monday to Friday, 9:30 – 1:30. If you need advice about welfare benefits, housing and homelessness, debt, relationship breakdown, consumer issues or anything else, get in touch: info@pwadvice.org | 01892 838619    94 Commercial Road, Paddock Wood, TN12 6DP