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Money Borrowing Process

6 Types of Money Borrowing Process in the UK

Do you need to borrow money? Yes, sometimes it’s important to keep pace with various types of emergency situations. But, there is one important thing that you need to consider while borrowing money. Make sure you can keep up the repayments, monthly or weekly. Any delay with the payments will lead to critical situations. 

There are various types of ways through which you can borrow money in the United Kingdom. So, it’s better to acknowledge all the ways, so that you can never face any type of hassle. In addition to that, you will also be able to know about all the repayment procedures of the modes of borrowing money. 

  • Payday Loans

The payday loan is the acceptance of an emergency fund until and unless you are getting paid. Asking for a payday loan can be expensive. There are some rules and regulations that the moneylender has to follow. The receiving timespan of the payday loans is very much short. If the lender breaks the rules and regulations, you can easily file a complaint against them. 

  • Electronic Cards

As the electronic cards are being taken into the consideration, you can borrow money from the credit card. There is also another electronic card which is called the debit card. You cannot borrow money from it. There are certain limitations regarding the borrowing of money from credit cards. 

What actually happens is that you buy something with the help of a credit card. The credit card company pays the money. On a month-wise basis, the company will deduct money from your bank account. This is the formal process of borrowing money. 

  • Store Cards

The store cards are very much useful when you buy anything from any retail shops or showrooms in credit. Indirectly, you are borrowing money and buying the desired item. Many shops have their customer’s monthly as well as budget account. 

People buy items with the help of store cards, and then transfer the money into that account, on a monthly basis. There are many store cards that have discounts on them. Utilize those cards in order to avail the discounts. In doing so, you have to pay a lesser amount of money compared to the original price of the product. 

  • Loans

There are various types of loans available when you are thinking about borrowing money from somewhere. Personal loans are only for your personal purposes. You can spend it anywhere you want. There are several terms and conditions that might be applicable to receiving a personal loan. 

In addition to that, to borrow money in the form of a personal loan, you also have to fulfil certain eligibility criteria. In case of home credits, which are popularly known as doorstep loans can be delivered to you without any efforts. Just fulfil the formalities and the company executives will send you all the necessary papers. 

  • The Conditional Sale & HP

The synonym of the Hire Purchase (Hire Purchase) is the conditional sale. It is in the other form of borrowing money from the lenders for goods. As the goods are in your usage, you have to provide a certain amount of money as the charge — monthly or weekly. It will solely depend on the lender, how he/she is willing to accept the charge. 

There is one difference between the conditional sale and hire purchase. In the case of hire purchase, there are no conditions mentioned in the agreement, whereas in the conditional sale, you have to obey certain conditions and sign the agreement, then only you will receive the goods, otherwise not. 

You have every right to end the Hire Purchase or the conditional sale agreement when you don’t need the goods any more. If you have paid more than half of the instalment money, then you don’t need to pay any more. Just return the goods and that’s all. If you haven’t, then you might have to pay 1 or 2 instalments even after returning the goods. 

  • The Bank overdrafts

There are basically two types of bank overdrafts — One is the agreed and the other is the overdrawn. On the other hand, you can also call the agreed draft the authorized draft and the overdrawn draft the non-authorized draft. The authorized draft has a fixed amount over a specific period of time. Let’s say, for example, you have to pay 500 pounds at the end of each month. 

The unauthorized draft is generally much more expensive than that of the authorized draft. As the experts say, it’s better to avoid it at any cost. The rate of interest is also higher than usual. If you want to avoid it, then always try to keep all the records of your banking transactions, clearly. If you think of getting overdrawn, rush to your bank and make an agreement with them. 

How about getting cash in hand?

The formal process of all the other methods of borrowing money takes some time. That is why there are several companies that can provide you with unsecured loans. It just takes one day or might be less than that. If you borrow money in the form of cash in hand, then it will be much easier for you to maintain the flow of your expenditure. 

The General process of Borrowing Money 

No matter where you take the loan, you have to follow some general procedures. First, provide all the necessary documents. After that fill-up the form with all the valid credentials. Then, provide them with all the document’s photocopies. Make sure that the information is genuine. After that, the loan company will verify all the documents, and they might perform an inspection. If something goes wrong, then your loan might get cancelled. 

What about borrowing money for the long term?

The long term loans will usually have long-term interests. It’s very much legitimate to borrow money for the long term, only if you have long-term planning. Several long-term money borrowing types are like education loans, business loans, housing loans and many more. 

Is it Legitimate to Avoid the CCJ?

The County Court only comes into the act when you delay the payments and cannot provide a justified reason. The creditors’ launch complaints against you to the court and the court issues judgement against you. Always try to avoid the mark of CCJ in your credit books. If it is present, then no creditors will feel confident to lend you money in the future. 

Struggling with Credit card Debts?

Debts have always been so annoying if you don’t have enough money to pay them off. Try to talk to the debt experts to find some effective solutions. There are basically two best ways to pay off credit card debts — One is paying all the money at once, and the other is paying the monthly installments. 

If you follow one of these, then you might not have to struggle with credit card debts. Of course, the credit card company will provide you with enough time to repay. So, it’s important to maintain the deadline.

Credit Cards: Costs and Purchases

No extra charges are applicable for using the credit card. If someone asks you for any type of additional charge, then immediately report to the credit card company, as soon as possible. With the help of a credit card, you can borrow money digitally on buying any goods. After that, when you pay the money, you have to give a certain amount of interest. 

The buying of credit cards also needs a decent amount of money. So, in order to bear a credit card, you need to spend a particular amount of money. After that, there is also an annual cost on the credit card that you need to pay the company to run the facilities of the credit card. 

Can you withdraw cash from the Credit Card?

Yes, you can withdraw cash from a credit card, but it can be expensive. When you repay the withdrawn cash, you need to pay the interest which can be much higher than the normal interest rates. After taking out the cash from the credit card, the interest rates get along. In addition to that, you might have to give a near about 2% of the cash handling fee. The fee is generally charged on the amount that you withdraw. 

Learn more: Standing Order

Using the Credit Card in Foreign Countries

Borrowing money and using it outside the United Kingdom will require a certain amount of commission charge. The charges will be on the withdrawal amount, as well as on the transfer. Moreover, the exchange rate will also make an impact on the amount that you withdraw and spend outside the United Kingdom. 

The Credit Card Cheques

The addition of money can take place with the help of credit card cheques. When you issue a cheque, the interest amount is generally much higher than that of the normal cheques. So, most of the experts suggest that you use normal cheques to avoid paying the extra amount of charges. 

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