Mortgages and secured loans
With a secured loan, an asset of yours (usually your home) is used as a security against the loan. If you don’t keep up repayments, you risk losing your home.
Overdrafts
An overdraft allows you to write cheques or take cash from your bank account, even if you don’t have any money in it. Banks can charge interest on overdrafts and you will have to repay the money eventually. If you want an overdraft, talk to your bank or building society and find out what their interest rates and fees will be. They may charge you for going overdrawn without their permission.
Hire purchase
Any item you buy on hire purchase is only hired until you have finished making all the repayments. This means you won’t own the item until you make the last payment, and the credit company may repossess it if you miss a repayment.
Social Fund
If you get Income Support, income-based Jobseekers Allowance, income-related Employment and Support Allowance or Pension Credit, you may be able to get an interest-free Budgeting Loan from the Social Fund.
A Budgeting Loan can help towards the cost of things you need for your home, clothing and some debts.
