A Beginner’s Guide to Borrowing

Guide to Borrowing

When you’re young, money is simple. As a child, you get your pocket money and you spend it on whatever you want, maybe learning about saving too if there is something out of your price range that’s really caught your eye. As you get older, you begin to realise that unfortunately a lot of your money will be spent on essentials that aren’t necessarily very fun; rent, utility bills, and car repairs to name a few, not to mention taxes! 

Money seemed easy to access but you soon realise just how hard you have to work for it, and how difficult it can be when it doesn’t quite stretch as far as you need it to. As adults, we have to be savvy with our money and sometimes we will have to borrow, such as taking out an instant cash loan during an emergency, to make ends meet until we are in a more secure position. Below are some of our options when it comes to borrowing. 


One of the most popular but notorious methods of borrowing is to get a loan. There are many different loan providers; from well-known banking institutions, to specialist, small, private companies, and the first step to making sure your loan is safe, is to choose a trustworthy provider. 

You will need to read through the small print of each agreement in extreme detail to avoid any loopholes that might lead you into financial trouble, as unfortunately loan providers are in the business to make a profit themselves. If you can’t afford the repayments, you should never take out a loan.

There are a number of safe loans available as it is well known that even the most sensible person sometimes needs a little help. These consist of things like overdrafts which are a safety net provided by your bank and which often do not charge any interest. Mortgages are another example.Barely anybody can afford to pay for a house outright, so mortgages essentially break the payments into manageable instalments in order to allow people to get onto the property ladder, and therefore also keep the economy running smoothly. 

Credit Cards

Credit cards are an everyday form of borrowing that many people use. The main advantage of a credit card is that you can use it to pay for any unexpected expenses and then pay it back off in regular instalments that are more affordable. Due to the convenience of a credit card it is easy to get into the habit of using it to buy things you may not really be able to afford. However, if you are sensible they can be very useful; credit cards can also be used to build up a strong credit history which acts as proof of your ability to meet repayments, helping you to be considered for things like mortgages and rental properties in the future.

Hire Purchase

Hire purchase is a method that a lot of companies use to sell their products, especially those who specialise in more expensive items. Buying something on hire purchase allows you to pay in instalments rather than all at once, so for the seller it opens up an entire market of customers who would not usually have been able to afford their products. The buyer will eventually own the product, however, the total of the instalments usually amounts to more than you’d usually pay for the product, which is another way in which the seller benefits from the arrangement. 

Borrowing money, despite having negative connotations, is often an unavoidable aspect of life, but there are ways to go about it to avoid getting yourself into financial difficulty. As long as you make sure you can always afford any repayments before signing up, and you only borrow money when you absolutely need to, it is a manageable option. How to borrow money is an important piece of advice for adults as well as many other financial topics like learning about the various kinds of insurance and which you will need to invest in. Take a look at for the help you need. 

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Written by themoneyshed

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