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Borrowing money

Before you borrow

Before you borrow money think about whether you really need to, or if you can pay for what you need in another way. You may want to think about saving up for your purchase. If you do need to borrow money, the first thing you should do is check you can afford the payments. Take a look at our information above on budgeting.

Before you borrow money carefully consider the choices that are available, the interest you will be charged and any fees you may have to pay. There are many ways to borrow money; from your bank, a credit union or other loan companies.

Payday loans

Payday loans are high cost short-term loans to tide people over until payday. Typically you have until your next payday to pay back your loan plus interest. Only take out a payday loan if you are really sure you can repay it on time. If you're already in financial difficulty they are unlikely to help you in the long run. 

Make sure that you only borrow money from an approved lender. The Financial Conduct Authority (FCA) keeps details of all licensed lenders, as well as everyone who has applied for a licence or has had one taken away or suspended. If a lender isn't listed as having a current licence, don't borrow money from them and don't let them come into your home.

Check the FCA register to see if a lender is licensed.

Loan sharks

Loan sharks are illegal lenders who often target low income and desperate families. They may seem friendly at first but borrowing from them is never a good idea - even if your credit rating is poor or you only need a small amount for a short while.

If you have been approached by someone who you think is a loan shark, you need to report them. Contact the police if you are in immediate danger.

Report a loan shark

If you spot a loan shark or you’ve borrowed money from one you can report them anonymously.

Advice and support

Our service provider directory lists a number of organisations who provide advice and support in Dorset.

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