Cheapest Ways to Borrow Money in the UK

Borrowing money has become the salvation to many people who suffer from the current effects of a weak economy. However, when people need cash urgently, they do not run to family and friends. Instead, they use the internet to take an online loan, which is more convenient than approaching people to borrow money. Loans can be costly, but nowadays, one can have lots of options and finding a loan product that is cheaper than another is quite easy. Here are additional tips on how to find the most affordable way of borrowing money if ever the need arises.

Zero Percent Purchase Credit Card

This type of credit card offers zero-interest for all the purchases that you made using the card for 12 to 24 months. Instead of taking a loan to buy something that you cannot afford to pay in cash, you can use your 0% purchase credit card and save yourself the interest that would come with a short-term loan. To make the most of the 0% purchase credit card. Buy something the moment you have the credit card and pay for whatever you bought in a 12 to 24 months instalment plan so that you do not have to pay the interest. However, once the free interest period expires, you could expect high-interest rates on your purchases.

Transfer Money from Credit Card to Bank

You can transfer cash from your money transfer credit card instead of taking a loan, that is, if you have not yet used up the limit of your credit card. Depositing money to your bank account from your credit card is also fast and easy. You do not have to pay interest. The bank might charge a certain percentage of the amount that you transferred. Still, this is cheaper than taking a quick loan.

Personal Unsecured Loan

 If you need more than £5000, you can take a personal unsecured loan. As long as your credit score is right, you would never have any difficulties in securing this type of loan. You could expect a lower interest rate compared to borrowers that have bad credit. You might also get a manageable repayment scheme. An unsecured personal loan is also a short term loan so that you do not have to spend years to clear your debt.

Use Bank Overdraft

If you have a bank account, you could borrow money using the overdraft, which is an amount that the bank would lend you even if you have zero balance in your account. However, you cannot borrow beyond the overdraft that you have arranged with your bank. If you do, the excess amount might come with a high-interest rate.

A Loan from Your Bank

If you have been using a bank for many years, you might get a loan at a lower rate. Some banks provide privileges to their loyal customers, such as cheap loans. You may contact your bank to ask about their loan products as well as to inquire if they give preferential rates to their loyal customers. If the bank refuses, t might be best to move to another bank with more desirable and affordable loan options for existing customers.

Secured Loan

If you have a property and an excellent credit rating, you can enjoy low-interest rates when you take a secured loan. Nevertheless, you must have a stable source of income to pay back your debt and prevent the lender from seizing the property you used as security.

There are many cheap loans that you can take if you have an excellent credit rating. Knowing that you are a good payer might convince lenders to give you some favours such as low-interest rate and easy repayment plan.

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