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for up to 40 days (292% per annum, variable)
Borrowing money in the UK
Borrowing money can take many forms in the UK, and there are a wide-range of different options available for those seeking credit to help them with all manner of financial situations.
While the following list isn’t exhaustive, it does cover many of the common forms of borrowing you are likely to come across in the UK:
Many of the above will in fact overlap, while others will be quite separate, and some of the terms will be more clearly defined in the financial industry than others. Each type of credit also tends to be tailored in varying degrees to a specific situation or need. A student loan, for instance, is a very distinct form of borrowing when compared to a payday loan, and they are each designed for very different situations.
Reasons for borrowing money
There are a range of different reasons you may have for looking to borrow money. The exact nature of your situation will affect the type of credit you are likely to use, so it’s a good idea to stop and think about your specific requirements, and whether you do in fact need to borrow money. In some cases the type of credit most appropriate to your situation will be relatively obvious, as with a mortgage or student loan. A payday loan meanwhile is intended to cover urgent and essential one-time expenses, but this could refer to many different situations, such as car repairs or replacing an important appliance.
Taking out such a loan just to cover an expensive and non-essential luxury item, or to facilitate regularly spending beyond your means on non-essential things, are not responsible forms of borrowing. It would be better in these cases to re-assess whether you really need to make these expenditures, see if you can make any changes to your budget to save some money for them over time instead, or perhaps see if you can borrow the money from friends or family. It is also inadvisable to borrow money as a way of servicing previous debts. In these cases you should seek proper financial advice.
Things to consider when borrowing
As you can tell from the variety of different loan options out there, it’s important to have a sense of what your needs are, what you are looking for, and what kind of things you should be trying to find out as a borrower. Here are some of the key things to take into consideration once you have decided to borrow money:
- Research the different options available, taking into account your reasons for borrowing, as this will be one of the biggest factors in determining the type of loan best suited to your needs.
- Having decided on the way in which you would like to borrow money, you should then compare the costs between different lenders for that type of credit and ensure you fully understand what all the costs will be. This includes finding out if there are any extra fees on top of the interest you will be charged on the original amount.
- Check whether you are eligible to apply for the type of credit in question. There is no point getting all the way through an application only to be declined because you do not in fact meet the basic eligibility requirements.
- See what information you will need when applying, and make sure this information is accurate when filling out the application form. Also check if any documentation will be required. Some lenders may ask for proof or copies of certain documents while others may not – it all depends on the type of borrowing in question.
- Understand what impact borrowing may have on your credit history. Because of the type of credit checks carried out by many lenders, even submitting an application for certain types of loan is likely to leave a footprint on your credit file. While this footprint in itself is not necessarily negative, if you make a large number of applications in a short space of time, this can leave a great number of footprints on your file, which may then be interpreted by some lenders as an indicator of identity fraud or a risky financial situation. This is why it is so important to consider your options carefully and try and narrow them down to one single choice before you make an application.
- Check the repayment terms of the lender you want to borrow from, including accepted methods of repayment. It’s important to only take out credit which you will be able to afford the repayments on. It is also important to know you can make your repayments in a way in which the lender can actually receive them. If you are intending to repay your loan via cash or cheque for instance, but your chosen lender is not able to accept these forms of payment, then you could run into problems.
How much can I borrow from SafetyNet Credit?
SafetyNet Credit is a revolving credit facility, ideal for helping those with short term borrowing needs. As we are a responsible lender, if your application with us is successful then your credit limit will be determined by what you can afford to repay. It will initially be an amount between £50 and £500. For existing customers who show they are able to afford a higher amount of credit, this credit limit can be extended up to £1,000.
There is no charge for having an account with us and you will only have to pay back any money you actually borrow, plus 0.8% interest per day. There are no other charges or fees. After your account is set up you will be able to make a manual transfer to borrow any amount up to your credit limit, whenever you need it. Alternatively, you can turn on our auto-deposits feature to have a transfer occur whenever your bank balance reaches a certain limit, allowing you to avoid unplanned borrowing fees from your bank. This makes borrowing easy and streamlined, with no need for multiple applications every time you require financial assistance.
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