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Debt and borrowing money

If you’re thinking of buying on credit or taking out a loan, make sure you compare the options and work out whether you'll be able to afford the repayments. If you’ve already borrowed money and you’re struggling to pay it back, there’s lots of advice to help you get out of debt.

Types of loan or credit

There are different methods of borrowing money, depending on how much you need, how long for, and how you pay it back. These range from bank overdrafts and credit cards to personal loans with a fixed monthly payment. The interest rate you’ll be charged varies depending on the type of loan.

Credit scoring

When you apply for a loan or credit, lenders work out your ‘credit score’ based on your personal circumstances, and check your credit history with credit reference agencies, to see how much risk they’re taking by lending you money. You can check your own credit file and have it corrected if it’s wrong.

Protecting your repayments

Payment protection insurance or income protection insurance can help to cover your monthly repayments if you can't work because of an accident, sickness or unemployment. Find out how to compare products, and their limitations and exclusions.

Managing debt

Get advice on which debts to pay off first, working out what you can afford to pay, and coming to arrangements with creditors. Check the pros and cons of getting a consolidation loan – it’s not always the best option. And find out where you can get free, independent help and advice.

Court claims and bailiffs

Find out what to do if you get a County Court claim saying you owe someone money. Check the difference between bailiffs and debt collectors, and the rules on what they can and can’t do. And get information about becoming bankrupt and alternative options.

Loan sharks

Loan sharks are unlicensed moneylenders who are working illegally. They charge very high interest rates, and sometimes use threats and violence to frighten people who can't pay back their loan. Find out what to do if you've borrowed money from a loan shark, and how to report someone in confidence if you suspect they're a loan shark.

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