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 much higher if unsecured.

Bank overdraft

Can vary widely from 0% to 19% for short-term authorised amount

But can be the equivalent in fees of 3,650% for unauthorised

19%

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%

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.

1,250%

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

1,500%

Loan sharks

Illegal lenders. Word of mouth. No paperwork. Make it up as they go along. Intimidate their victims.

Steer very clear.

Don’t quote an APR but equivalent is 8,000%

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.