What to Ask Before Borrowing

If you really do need to borrow some money, there are a number of questions that you need to ask yourself AND your lender before you take out that loan.

Ask yourself:

1. Are you borrowing this to pay for a long-term item, such as a house, car, major appliance, or are you using the money to help with your current living costs?
2. Is this the cheapest way for you to borrow for this purpose?
3. How secure is your (or your partner's) job over the period of the loan?
4. Is there another big item that you are going to have to borrow for in the near future? How will this affect your ability to make the repayments?
5. Can you afford the repayments on this debt if your (or your partner's) overtime or bonus is cut or disappears?
6. What does your total debt add up to after you've borrowed this?

Ask your lenders:

1. What is the APR?
2. Are there any set up fees?
3. What is the length of the loan period?
4. Is the interest rate fixed or variable over the period of the loan?
5. Is the loan secured on your home?
6. Are there any penalties for early repayments?
7. Are there any penalties for missed or delayed interest payments?
8. Are there any other charges?