| Type of borrowing |
|
Typical APR |
| Bank loan / other personal loan |
Not just banks, but building societies & other lenders. A
set amount over a fixed term. Can be ‘secured’ (against car or
house) or unsecured – APR higher. |
9% if secured & from a bank can be higher if unsecured |
| Bank overdraft |
Can vary widely from 0% to 19% for short-term authorised
amount |
19% |
| But can be the equivalent in fees of 3,650% for
unauthorised |
| Credit Card |
Buy now pay later plastic money. Can be useful but can also be
a way of getting trapped into debt. |
18% |
| Store Card |
Pushed by stores. Not as useful as credit cards but cost
more |
25% |
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| Finance arrangement |
Hire purchase & rent-to-buy. The extras & small print
are all-important. Be careful. Can be anything from 29.9% quoted in
adverts to 350% on fact, by the time you leave the store. |
‘29.9%’ to 350% |
| Credit Union |
The good guys. Self-help organisations & not-for-profit.
Rochdale doesn’t have one at present. |
12% |
| CDFI (community development finance institution) |
Next best thing to a credit union. Not for profit loan company.
Nearest one is Moneyline GM based in Salford. |
37.96% |
| Catalogue shopping |
As it says, but also online. It’s not just buying, it’s
borrowing. |
35% |
| Payday loan |
Unsecured short-term personal loan. Can snowball badly. |
1250% |
| Logbook loan |
Personal loan secured against your car. Can spiral into a lot
of debt & no car. |
430% |
| Doorstep Lenders or Home Credit |
e.g. Provident / Greenwoods / Deebank. Legal if they have a
licence. Mainly word of mouth but also now online - same
firms. |
250% to £1500% |
| Loan Sharks |
Illegal lenders. Word of mouth. No paperwork. Make it up as
they go along. Intimidate their victims. |
Don’t quote an APR but equivalent is 8,000% |
| |
Steer very clear. |
|
| Social Fund loan |
If you are on a qualifying benefit, can borrow & the
repayments come out of your benefit by instalments. You only pay
back what you borrowed. |
0% |
| Family & friends |
If you can’t repay you risk the relationship. |
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