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Your Borrowing Options Explained

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Although good financial management is vital, almost all of us can find ourselves in a situation where we need to borrow money. For some, this will be because an unexpected bill has arisen; for others, poor monetary decisions may be to blame. Irrespective of the cause, the problem is the same: you require money that you simply don’t have.

Many people are unfamiliar with the wide array of choices available to them, but it’s really important to understand the different avenues that are available to you before making any hasty decisions.

To help you out, here’s a basic breakdown of the most common borrowing options:


Most bank accounts will allow you to borrow between £500 and £2,500. If you are looking to borrow a small amount over a short period of time, a bank overdraft can be a more viable option compared to a loan. This avenue will be open to almost everyone but it’s best to check the lenders terms and conditions as each one differs from another.

Credit Cards

Typically lenders will allow you to spend up to £5,000 on a credit card. Although you will be required to pay interest, provided you make your repayments on time credit cards help to stop your debts from spiralling. They also offer a useful opportunity to build a positive credit history, as long as you stick to the terms of your agreement. Although if you only repay the minimum amount it could take a very long time to repay the debt, and you could end paying back a lot more than some of the other options here.

Second charge mortgage

Second charge mortgages, can be a useful option for those with a mortgage, as the loan is secured against your home. They provide borrowers with access to larger amounts of capital over a longer term compared to other alternatives. Remember a Nemo loan is secured against your home so you must make sure you can afford the repayments.

Unsecured Loans

Unlike second charge mortgage, unsecured loans are not secured against your home but they can have high interest rates and stringent credit checks. This makes them largely unsuited to those with a poor credit record, although they can be an ideal choice for applicants with a positive history of borrowing who require upwards of £5,000.

If you need to borrow money, which option sounds best for you?

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