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Ways to borrow

Find out how we can help you get the funds you need

Your borrowing options

There are lots of reasons you may want to borrow money, from a new car, to home improvements or a surprise bill. Whatever your situation, it’s important to understand how you can finance your needs.

Credit cards

You can use a credit card to spend up to an agreed credit limit and pay it back later. If you owe money, you have to make at least a minimum payment – a percentage of what you owe – each month. If you don’t repay it in full each month, you’ll usually be charged interest.

Pros

  • Some cards offer interest-free purchase or balance transfer periods and reward programs

  • Flexible monthly repayments

Cons

  • Interest can stack up over time if you only make the minimum payment each month

Next steps

Personal loans

A loan is where you borrow a set amount of money for an agreed amount of time. You pay back the full amount – usually in monthly instalments – plus interest. For most fixed-term loans, the amount you pay and the rate of interest is fixed at the outset and won’t change until it’s paid off.

Pros

  • Suitable for large purchases or consolidating existing borrowing

  • You know exactly how much you need to repay each month

Cons

  • Less suitable for smaller purchases eg less than £1,000

  • Less suitable for short-term borrowing eg less than a year

Next steps

Overdrafts

Bank accounts with arranged overdrafts let you continue spending money from your current account when your balance falls below £0. To help you manage unexpected bills, your arranged overdraft will usually include an interest-free buffer. But once you pass that amount, you’ll be charged interest.

Pros

  • Some bank accounts offer interest-free buffers on their arranged overdrafts

  • Emergency budgeting

Cons

  • Not good for long-term or regular borrowing

  • High interest rate, where interest is charged

Next steps

Borrow more on your mortgage

Borrowing more on your mortgage involves taking on more lending from your current mortgage lender. Typically with a mortgage, you'll pay the loan back on a monthly basis and you'll need to make sure you can afford your repayment because it is secured against your home.

Consider this option for larger purchases with repayment over a longer period, typically over £10k and 60 months.

Pros

  • Frees up funds for large purchases

  • Usually lower interest rates with longer repayment periods available

Cons

  • Paid back over longer period therefore could pay more interest

  • Secured against your home, so you could lose it if you miss payments

Next steps

Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up with repayments on your mortgage.

Find the right option for you

Depending on what you want to do, some borrowing options are more suitable than others. Which one is right for you will depend on your personal circumstances. You need to consider your borrowing needs, how much you want to borrow, how long you need to pay it back and your current financial situation.

 

Here are some of the most common reasons to borrow money and how you could fund them. Other options may be available, if you're uncertain which one is best for you, please speak to an adviser. We also have a useful guide to Buy now pay later (BNPL), explaining how it works and whether it might affect your credit score.

Reason to borrow Credit card Personal loan Overdraft

Borrow more on your mortgage

 

This borrowing is secured against your property.

Buying a car  (if the car's low value, or there's a purchase offer on card
     (for larger purchases with repayment over a longer period)
Holiday and flights        (for larger purchases with repayment over a longer period)
Day-to-day spending

 

(if you repay your balances each month)

     
DIY projects        (for larger purchases with repayment over a longer period)
Buying appliances or technology        
Debt consolidation  (if there's a balance transfer offer)      (for larger loans with repayment over a longer period)
Vehicle repairs    

 

(if cost can be repaid in the short-term)

 
Unexpected household / utility bills        
Moving costs        
Home renovation / improvements        (for larger projects with repayment over a longer period)
Wedding expenses        (for large expenses with repayment over a longer period)

Find the right option for you

Depending on what you want to do, some borrowing options are more suitable than others. Which one is right for you will depend on your personal circumstances. You need to consider your borrowing needs, how much you want to borrow, how long you need to pay it back and your current financial situation.

 

Here are some of the most common reasons to borrow money and how you could fund them. Other options may be available, if you're uncertain which one is best for you, please speak to an adviser. We also have a useful guide to Buy now pay later (BNPL), explaining how it works and whether it might affect your credit score.

Reason to borrow Buying a car
Credit card  (if the car's low value, or there's a purchase offer on card
Personal loan  
Overdraft  

Borrow more on your mortgage

 

This borrowing is secured against your property.

 (for larger purchases with repayment over a longer period)
Reason to borrow Holiday and flights
Credit card  
Personal loan  
Overdraft  

Borrow more on your mortgage

 

This borrowing is secured against your property.

 (for larger purchases with repayment over a longer period)
Reason to borrow Day-to-day spending
Credit card

 

(if you repay your balances each month)

Personal loan  
Overdraft  

Borrow more on your mortgage

 

This borrowing is secured against your property.

 
Reason to borrow DIY projects
Credit card  
Personal loan  
Overdraft  

Borrow more on your mortgage

 

This borrowing is secured against your property.

 (for larger purchases with repayment over a longer period)
Reason to borrow Buying appliances or technology
Credit card  
Personal loan  
Overdraft  

Borrow more on your mortgage

 

This borrowing is secured against your property.

 
Reason to borrow Debt consolidation
Credit card  (if there's a balance transfer offer)
Personal loan  
Overdraft  

Borrow more on your mortgage

 

This borrowing is secured against your property.

 (for larger loans with repayment over a longer period)
Reason to borrow Vehicle repairs
Credit card  
Personal loan  
Overdraft

 

(if cost can be repaid in the short-term)

Borrow more on your mortgage

 

This borrowing is secured against your property.

 
Reason to borrow Unexpected household / utility bills
Credit card  
Personal loan  
Overdraft  

Borrow more on your mortgage

 

This borrowing is secured against your property.

 
Reason to borrow Moving costs
Credit card  
Personal loan  
Overdraft  

Borrow more on your mortgage

 

This borrowing is secured against your property.

 
Reason to borrow Home renovation / improvements
Credit card  
Personal loan  
Overdraft  

Borrow more on your mortgage

 

This borrowing is secured against your property.

 (for larger projects with repayment over a longer period)
Reason to borrow Wedding expenses
Credit card  
Personal loan  
Overdraft  

Borrow more on your mortgage

 

This borrowing is secured against your property.

 (for large expenses with repayment over a longer period)
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