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Couple looking concerned with bill and laptopBorrowing money

There are different types of lending.  Whilst some ways are good ways to borrow money, some are very bad...and even illegal:

Green triangle1. Affordable lending loans - these are loans with good interest rates

These loans are available from banks and credit unions.  They charge about 6% to 10% APR.

Amber triangle with a question mark2. Credit cards - higher interest rates (over 17% APR)

Credit cards can be useful for one-off large purchases that you pay back in a way that is affordable to you over a period of time.  If you are using a credit card for day-to-day things like food, household bills, rent or travel you need to seek advice before it gets out of hand.

Yellow triangle with an exclamation point3. Doorstep lenders - very high interest rates

These high interest loans are provided by people who come to your home.  They charge about 400% APR!

Yellow triangle with exclamation point inside4. Pay day loans and cheque shops  - EXTREMELY HIGH INTEREST RATES!

These are very high interest loans, which are often over 3,000% APR!  We have more information coming soon about pay day loans and cheque shops - please check back.

Red triangle with cross in middle5. Loan sharks  - these loans are very bad (even illegal) and SHOULD NEVER BE USED!  If you are already a loan shark victim, you should get help now.

This type of  money lending is illegal and are not enforceable by the lender.  There will be no loan agreement with an illegal money lender, and the sky is the limit on what interest they charge. They can be frightening - people often become involved in other forms of crime.  However over 50% of the victims of illegal lenders considered them a “friend”. 

If you think you are a victim, you should get help straightaway:

  • Telephone - 0300 555 2222
  • or by text to: loan(space)shark(space) + your message to 60003
  • You can also find out more at :

Paying back loans

Before you take out a loan, you need to be sure you are able to afford it and you have a plan on how to pay it back.  To do this you need to understand your budget.

this page was last updated: 12/01/2013 13:48:00


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