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Revealed: The top three reasons for borrowing money

Have you borrowed money to pay for something, only to find your wallet in a worse state than before?

Top reasons for taking out a personal loan include consolidating debts so they are all in one place (27%), purchasing a car or bike (26%), and making home improvements (20%), according to the Lloyds Lending Report.

Borrowing money and not being able to pay it back is an easy trap to fall into and can end up spiralling if you’re not careful. Here are some ways to keep your borrowing habits healthy. 

Before you borrow – the dos and don’ts

Do think about whether you really need to spend the money in the first place. If it’s something you need, there may be alternative ways to get it. Take a look at buying the item second-hand, or check out recycling websites. 

Don’t buy things straightaway, if you can help it. Give yourself a two-day cooling off period for impulse buys and shop around for the best deals.

Do consider your options. If you can save before you spend, you avoid having to pay the interest costs that usually come with a credit card, for example.

Spending money on yourself or your home isn’t the only reason for borrowing money. Of those who borrowed for a special occasion, 70% did so to pay for Christmas while nearly half (46%), did so to pay for someone else’s birthday, according to Lloyds.

Our research revealed almost half of Brits were planning to turn to credit cards, store cards and overdrafts to cover the cost of Christmas last year.

Planning ahead is a good idea for the special occasions you know you will want to splash out on. If you started to save £50 a month from this month, you would have £400 by the time Christmas rolls around again (which always seems to happen earlier and earlier each year!)


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  • Scott / 28 April 2018

    I would like to apply for a end of the month loan amount of £300

  • Christopher Williams / 29 November 2015

    Exactly correct. Poorer people often get into debt in order to pay petrol and bills only to find their financial situation gets worse. On the other end of the scale lots of people with money have several cards - I have seen them go through cards at s checkout until they find one with credit on it.
    Its very easy, or at least it used to be, to borrow money when you see something and you want it now! I admit I have done it myself. I often say to myself paying back the money will be fine without really doing any sums. Again I have borrowed money to buy electricity when I was really broke, and payday lenders gave me money easily but I only made matters worse. I went to a local money advice center and got things sorted, using free advice. That's a good point, don't use the money advice people that charge, there are plenty of organizations that will help free of charge. I used one run by the local council.
    I fear for the people who have to be on benefits now, and have to borrow money - the welfare cutbacks are callous and discriminatery. You can't even get crisis money - so what are people supposed to do?

  • Victor Blunden / 19 June 2015

    Who has £50 a month to save? You clearly don't know your clients. The rich don't need your money tips but the poor do,... so be realistic. At the end of the month most people are lucky if they have £25 left -and that will be carried over to pay next months bills. The poor simply don't have any money available to save. I was working and sometimes only had 39p left at the end of the month. I know people who had to call in sick as they had no money to put petrol in their car to get to work. So start being realistic in your advice.

  • YOHANA S MMARI / 2 June 2015

    Most of us do borrow but the main push factor is that, we are not patient for what we need.
    Its not that we cant make it without borrowing, but its mostly due to the anxiousness of having things at the times that we exactly anxiuos of having them. But with being smart and patient we can avoid borrowing and working on our needs smartly. BE SMART

  • jackie / 1 June 2015

    There are many suggestions and ways told to curb expenses, loans and other debt related issues. I am not saying there don't work but some cases are very very difficult. It takes practise and will power to escape. I don't like debt, who does? But in some cases I borrow to stasy stable. I borrow what I can handle. Good advise, but all stories are not the same

  • Silvia Porcogosova / 31 May 2015

    lm need money please.

  • Jennie / 31 May 2015

    Thomas why don't you start a blog tracking your efforts at starting a business etc.? Quite agree lots of 'professional' advice is basic stuff to those struggling to make ends meet.

  • Sian / 31 May 2015

    Great advice thanks

  • Thomas Sturge / 31 May 2015

    I DO NOT have ANY money to save AT ALL. At the moment, I'm not earning and I'm also trying to set up my own business, so if I have to spend anything on a credit card (which I've never done before), then it's purely through necessity and not through frivolous whims. I've never been in that privileged position, as my budget is tighter than 99.9% of the population, so consequently every single penny is watched like a hawk and anguished over. I probably know more about managing money and budgeting than the people who put this site together.