Borrowing and credit basics
Most of us will need to borrow money at some point in our lives, whether it’s for a student loan, a car, or to pay for a first home. Find out about the range of borrowing products available to people aged 18 and over, and explain how to use them best.
Borrowing - products available from age 18
Most forms of borrowing charge interest, which the lender must show as an Annual Percentage Rate (APR).
This enables you to compare the cost of different products.
Below are some of the most common forms of borrowing.
Roughly, the lowest APR products are at the top and the highest are at the bottom.
When should you borrow?
Some people say that debt can be classed as good debt or bad debt:
Good debt – any borrowing that enables you to make money or improve your prospects in the long term, such as a student loan, is classed as good debt, as long as you can manage the repayments.
Bad debt – any borrowing that provides no return at all, such as borrowing to fund luxury items or expensive trips.
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