Alternatives to UK Loans
Think before you borrow
Do you really need the loan?
Borrowing money is expensive.
For example;
if you borrowed £20,000 and paid it back at £169 a month for 180 months you would have repaid a total of £30,000.
In other words it would cost you fifty percent of what you borrowed.
Heard the old saying "Neither a borrower nor a lender be..."?
Consider some loan alternatives
Loan alternatives
Borrowing from your employer
If you can borrow from your employer then do so. They usually charge much lower interest.
The only drawback is that you may be tied down to the job more than you'd like.
The other issue is that if you want to leave the firm you'd probably have to pay the loan back there and then.
This could mean you'd have to refinance
the debt at a higher rate than necessary.
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Local Credit Unions
These are a great response to loansharks who prey on poor neighbourhoods.
They're self-help type organisations that specialise in running their own savings and lending schemes.
Check if you've got one in your area and whether you're eligible for a loan from them.
Use your savings instead?
If you really need the money and have any savings tucked away, you should definitely consider using them instead of taking out a loan.
It'll cost you a lot less in the long run.
If you take out a loan you can end up paying back double what you borrowed.
But you're very unlikely to make as much money from your savings if you left them where they are.
At
the end of the day, you'll end up with more put aside by not having spent as much
on a loan.
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Go without!
Just say no!
Do you really need that brand new car?
Is it really worth the extra cost of borrowing to get it?
If the loan is to get material possessions, ask yourself why the rich always seem to say that money doesn't bring them happiness.
At best it just gives them a sense of security.
But you may end up feeling even less secure if you borrow beyond your means and have a large debt to repay.
And the shine will soon go off whatever it was you so desperately
needed...
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