High street banks, building societies or credit cards are not always an option, and there are lots of different ways to borrow.
Credit Unions
Credit Unions are 'not for profit' financial co-operatives, owned and controlled by its members. Members save regular amounts in their account and these savings are then used to make low-cost loans - rather like a large communal piggy bank!
Depending on where you live or work, there is always a Credit Union nearby.
If you need to borrow money or buy things for the home, always try your local Credit Union first.
Watch out for the following very expensive forms of credit:
Doorstep lenders
'Home Credit Companies' offer cash loans or shopping vouchers, but charge a very high rate of interest.
Payday loans
Payday loans are short-term loans designed to tide you over until payday, but they can be a very expensive way to borrow.
Being so readily available can make them dangerous if you have money troubles, as you can quickly fall further into debt, or rely on them every month.
Never take out a payday loan unless you're 100% certain you can repay it on time and in full. If you need a loan, talk to your bank or local Credit Union first - it could save you £££s!
If you do apply for a payday loan, make sure you have all of the facts. The Money Advice Service have lots of useful information on their website.
If you are considering a loan to repay other debts, contact Wrekin Debt Advice for free expert advice before you do anything.
Money Helper has lots of useful advice, including..
Advice about Doorstop Lenders
Advice about Hire Purchase
Budgeting
Budgeting | The Wrekin Housing Group
Be in control of your budget
Money Helper has lots of information to help you manage your monthly budget
Online tools
There are lots of free interactive tools online and available for smartphones, all designed to help you keep track of your spending. Money Helpers ‘Budget Planner’ is great to record all your spending and offers personalised tips to help you.
Pay as you view borrowing
There are lots of companies, who will sell you items for the home or offer cash loans, and you repay the debt through a coin meter linked to your TV power supply. This is a very expensive way to buy goods or borrow cash and if you don't keep up your payments you won't be able to use your TV!
The weekly repayments might seem low, but always look at the amount you pay back over the whole period to see how much its really costing you
Weekly Payment stores offer new or pre-used items for the home, for a weekly payment. You will pay a premium price for the items, will have to pay interest, plus if you don't have any home contents insurance, you will also be charged a further amount in case anything happens to the goods before you have paid for them in full.
For example,
Buy a branded washing machine on sale for £350, and pay for it over 3 years. With interest and extra charges it will cost you nearly £600!
You can buy the same good quality basic washing machine for about £200 on the high street.
Weekly payment store items are on Hire Purchase, so you don't own them until you have made all the repayments...normally this will take three years!
REMEMBER - Before you use a weekly payment store, speak to your local Credit Union about a low-cost loan to help you buy what you need. This will mean you can shop around to get the best deal, and the goods are yours straight away! Loans can be repaid weekly or monthly and you can pay a little extra to build up some savings.