What are the different ways to borrow money?
There are a number of different options available to you, so it’s important you do your research and understand them all before you make a decision about how to borrow your money. Here’s a few examples:
This is where you use more than you’ve saved in your bank account and will mean you’re charged interest on the amount that you go over. You will need to make sure your overdraft is authorised by your bank before you borrow money in this way. If you don’t, you may be blocked from using the extra funds and it could harm your credit score.
This is where you borrow a certain amount and pay it back over a pre-defined period of time. Typically, these repayments are made via monthly instalments and will include interest, which means you will end up paying back more than the original amount. To give you an example, loans of between £1,000 and £5,000 to be repaid over 12 to 36 months.
If you don’t want to borrow via loans or an overdraft, you could consider taking out a credit card. It acts as a continuous line of credit, to be used within the agreed limit, and means you can make purchases without paying upfront before settling your balance at a later date. You can choose to repay the money in one go or via instalments, but there will always be a minimum monthly repayment to make.
How to borrow money online with 118 118 Money
Here at 118 118 Money, subject to eligibility we offer two distinct types of financial solutions to our customers. Our personal loans and our 118 118 Money Credit Card. Depending on your own circumstances, we may be able to offer you a solution to borrowing money.
Perhaps you’ve decided a loan isn’t quite right for you, and you’d prefer the flexibility and lower interest rates offered by our credit card.
Before you apply, use our eligibility checker to see if you’re likely to be approved, as well as the credit limit we can give you. And don’t worry, it won’t affect your credit score.
To be considered for the 118 118 Money Simple Interest Rate Credit Card, you’ll need to:
- Be a UK resident
- Be aged between 18 and 70
- Earn at least £8,400 a year
- Not be in arrears with another lender
- Have had no default payments in the past six months
Whilst using the eligibility checker we’ll need some details, such as your:
- Email address
- Date of birth
- Current employment and residential status
- Net monthly income
- Home address
Why choose a 118 118 Money Credit Card?
- A credit limit of up to £1,200.
- Repay in instalments or in full to suit your needs. There’ll be a minimum monthly repayment and you should always pay back more than this if you can.
- 51 days interest-free when you repay your balance in full each month.
- You can check your eligibility without any effect on your credit score.
What should I think about before I borrow money?
Before you apply for any financial product, it’s important to do your own research, and ask yourself a series of questions so you can be sure that borrowing money is the right option for you and your situation. Consider the following examples:
Do I really need to borrow money?
This is the most critical question. There are plenty of ways to borrow money and lots of places to borrow it from, but having all those options doesn’t always mean it’s the right choice for you. Consider your situation, what you’re using the money for and think carefully before you decide.
How much can I afford to borrow?
You’ll likely have an idea of how much money you need to borrow. But that’s not the same thing as how much you can afford. Remember, it’s not just the initial amount – there’s interest as well, which means in the long run you’ll end up paying back more than you borrowed, and the monthly payment amount. Not only that, but your credit score could affect the interest rate you’re offered. The lower your score, the higher the rate, which in turn means you can afford to borrow less.
What if I need to borrow more than I can afford?
You should never borrow more than you can afford. When you borrow money via a loan or credit card, you sign a contract that represents a legal agreement with your lender. If you do not think you will be able to repay, then you should not borrow the money. The consequences of not repaying or defaulting are extremely serious and will have a long-term effect on your financial future, including having a negative impact on your credit score.
What are the repayment terms?
When you borrow money, you need to be crystal clear on exactly what is expected of you. All lenders are legally required to tell you how much your monthly repayments will be. Varying from lender to lender, this could be at the point you’re using an eligibility checker or at the acceptance stage.
This includes listing interest, while it should also be clear whether that rate is fixed or variable, as this could affect how much you pay each month. And when taking out a loan, you should be in no doubt as to when the agreement ends – for example, in 12, 24 or 36 months.