Borrowing basics

Borrowing tips

Different types of borrowing

Borrowing sensibly

Borrowing sensibly

The information in this guide was last updated on 26/02/2014

Be vigilant

There are some very expensive and risky ways to borrow money. Make sure that any lender you are considering is regulated by the Financial Conduct Authority (FCA). Be sure you understand the extent of the service the lender provides, and what they will be charging you.

Be extremely cautious about companies you’ve never heard of, particularly when looking for a loan, and always do some research to make sure they are reputable. It’s also wise to be careful when applying online or if you receive emails offering financial products. Do not give out personal details unless you are convinced the company is genuine.

Be aware that identity fraud is on the increase. The credit reference agency Experian revealed that last year 20 in every 10,000 applications for credit or other financial products were fraudulent.

Protecting your loan

Once you’ve chosen the right deal, you may want to consider taking out insurance to help you if something unexpected were to happen. Protection such as Payment Protection Insurance (PPI) and card protection are often offered by lenders or can be bought independently.You shouldn't feel pressured to take out any form of insurance, it’s entirely up to you whether you feel you need it and can afford it.

PPI may also not offer relevant cover if you are self-employed, unemployed, retired or have a pre-existing illness. Always check the small print and carefully consider your circumstances before committing to any form of financial protection. When considering card protection it’s important to check that you don’t already have cover, perhaps as a benefit of your bank account or as part of your home insurance cover.

Download our spending wisely guide

Our Spending wisely guide provides an easy, step-by-step guide to the different borrowing options available.