Loans not always the easy option
In the variety of loans available, the overdraft looms large as a very easy but extremely expensive way to borrow money. If you have an authorised overdraft level it can be very tempting to simply spend your way onto it - no complications, no special forms - what could be easier. The answer is that nothing could - until the charges start rolling in, at which point you realise that you have got a tiger by the tail.
Letting go is not an option - the charges have to be paid, but when you have paid for bounced cheques, failed direct debits, letters advising you (at a cost) that your debt is climbing, in fact a charge for every action which your bank has to take (and there are many) you will realise that the tiger's claws and teeth have caused some extensive and expensive wounds. The price comparison website uSwitch.com has estimated that banks are drawing an extra £100 million a year from overdraft charges. The Competition Commission is taking action to reduce costs for bank customers, but this will not happen overnight and is not likely to put overdrafts in competition with straightforward loans.
So you need funds but are hesitant over which way to go? As always you should examine the market as completely as time will allow, bearing in mind that on-line enquiries can save many hours of work. uSwitch recommends a loan which is sufficient to see you through the current difficulty, but with the margin for error held down to its sensible minimum; try to avoid paying for additional loan sums which may be unnecessary. On the other hand a small increase in the loan value may move you to a lower interest charge rate - check it out just in case.
Whatever you decide to do, it is important to ensure that the repayments will not overstretch your ability to pay - this would merely compound the problems which you are currently facing. Be realistic, then as you approach the final payments you will be able to relax, safe in the knowledge that you have produced and operated a successful financial plan - you will be free to contemplate a future without debt!