what's the best way to borrow a small amount of money?

[HeadFairy]

I only want to borrow about £1500 for a year but because it's a small amount the rates are shocking, I've tried money supermarket and the rates vary from 19% apr to about 15%. Is that it or is there another way of doing it?

Credit union, your local CAB should know about it or even be involved in it.

I've never heard of a credit union. Is it something you have to be on a certain income level to qualify for? I'm not broke, but I do want to tidy things up after my mat leave and clear up any outstanding debts and give me a little bit of cash to tide me over until I get paid next month.

I went to a talk today from CAB about credit and they said about credit unions. I don't think you have to have a certain income level to qualify.

just googled credit unions. I've never heard of them. There don't seem to be any in my area. If you join one what do you have to do? Do you have to have savings to put in once your loan is repaid?

I used to do volunteer work for a credit union. Search the ABCUL website here to find your nearest one to you. They have a 'common bond' principle that limits who they may lend to. For example, people who live or work in a particular town or county. If you belong to a trade union or certain types of industry they often have a credit union for their members too.

Ours used to charge 12% interest per annum for reasonably good credit worthy customers.

How close do you have to live to one to be accepted? I've found one that's about 20 minutes away from me in a different town..

It depends on their common bond. Just ring them and ask.

I can't recommend this set up as I haven't used it but I've read about it and heard radio items - its all above board afaik and is a bit like a credit union but done for individual profit.

zopa

i know it's obvious but surely your bank can offer you better than 19% on a loan or an agreed overdraft?

Have you looked here;

www.moneysupermarket.com/loans/?gsl=1&p=0&ef_id=1816:3:s_4de097b4b9d0a3b2bf4eaced64886395_5101523429:TMm5VgqoEEMAABu@y1oAAClE:20101028175638

zopa - fab u lous. y9ou can either do a listing which is kind of like an auction thing and people bid to lend to you or do traditional loan - i think at 10% interest. i did a listing one for £3500 over 3 years and got a rate of 8% , would highly recommend

odelay - do you have to tie your money up for a specific period? It does sound like a way to get a better interest rate than you can from a bank at the moment.

wallows, that was with my bank, they only dp better rates for larger loans and I've reached the £900 limit for overdrafts, they say if I want more I have to take a loan out.

lborolass, thanks for that, will check them out.

Can you get a credit card with 0% interest?

Or take out a credit card, run up £1500 then do a balance transfer to a 0% card, you only pay about 2% fee on the balance transfer

I did think that, I do have a little bit to pay off on my credit card and transferring to a 0% interest card makes sense but I really wanted some cash as well to clear my overdraft as well.

You could transfer your overdraft to another bank who will give you a bigger overdraft. i've got a £2600 one with mine and only pay £5pcm.

lborolass, no you can repay early with no penalty. and i quite like the ethos of it too, your interst is going to joe bloggs in the street rather than some nasty corrupt bank

Thanks Odelay, I'm going to have a really good look at the website

I do like the look of zopa odelay, but you can only do three or four year loans. I was looking for a shorter term, if I take £2000 out for three years it'll cost me more overall than if I took the same amount out with a bank offering a higher rate over a shorter period of time.

What are you being charged for your overdraft? Is it more than you'd pay for a loan?

I'm not sure lal, it's more the amount. Santander won't let me go beyond £900 on an overdraft, anything over that and they say I have to take out a loan, for which they'll charge me 18.9% apr if the loan is over 12 months.