Thinking of getting a personal loan? Check out these first!

By Charlotte Yau

Need to borrow some cash? There are more options than just a personal loan, and they can be far cheaper too.

Getting a personal loan can involve a lot of hassle with annoying application forms and monthly repayments, but there are other ways to get the bank to give you money. On the other hand, if you've been turned down for a loan, here's a nifty article. 

An interest-free overdraft

A number of current accounts offer a 0% interest overdraft facility. This is money the bank lets you use when you are running low.

Different banks will offer different overdrafts and the amount you get will depend on how decent a borrower the lender thinks you are. This will be based on your credit rating, which is a record of how you have kept up with your finances and bills in the past.

You may need to keep a minimum amount in the account but you could get more than £1,000

But check how long it is interest –free for and make sure you repay the bill each month and don’t go over the limit as you could get hit with steep charges that could push you into debt.

A 0% new purchase credit card

Contactless cards means putting it on the plastic has never been so easy. You just scan your card when you want to pay for a speedy getaway.

Many credit cards offer 0% interest on new purchases for a certain period.

This means you can splash the cash on a holiday or night out with your mates and just remember to pay it back each month so you don’t get hit with interest.

The credit limit you get will depend on your financial circumstances.

Also keep an eye on how long the interest-free period is for so you don’t end up with extra charges.

A 0% balance transfer credit card

If you're already paying interest on a debt, you could turn it into an interest-free loan by moving it onto a credit card offering 0% on balance transfers.

This will let you pay off the debts on one card by transferring them to another and then paying it off with no interest over a certain period.

You can get balance transfer cards with an interest-free period currently of up to 40 months. The credit you get will again depend on your rating and your job.

There will still be transfer fees to pay and if you don’t pay it off by the end of the interest-free period you will get saddled with high interest charges.

A 0% money transfer credit card

Instead of transferring from one credit card to another, you could move your debts to another bank account using a money transfer card.

This works differently to a balance transfer card as rather than just moving credit card debt, you can also use a money transfer card to pay off other debts such as an overdraft. A money transfer card moves money onto a current account rather than a credit card.

These also come with transfer fees and you could get an interest-free period of up to 40 months, but watch out for penalties for late payments.

These are all pretty short term ways to borrowing funds and if you need lower interest over a longer period, it may be worth looking at a low rate credit card.

Top takeaway

There are alternatives to personal loans that will get you the cash with a lot less hassle and in a shorter space of time. Establish which one best suits your needs, skip the annoying application forms and get the money you need. If your still thinking of getting a loan for a little extra cash - read this and this.

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