Ways To Borrow Money When You Need To

Sometimes we may need to borrow money. There may be a million reasons why. Jobs are no longer secure, with the worry over Brexit, zero-hour contracts and casual work all too common it's a worrying time for many money wise. If you are self-employed then an episode of illness could affect your bank balance and unexpected bills like the boiler or car breaking down, your windows need replacing, or a large dental bill can leave a big dent in your finances. Ideally, you would have a pot of money saved for emergencies like these but sometimes you just need to borrow money. 

This post is in collaboration with Polar Credit, a finance company that offers a credit line form of credit. This is an ongoing form of credit which you can use to borrow money when you need to. For more information on the application process, using the credit line and the repayment process read about Polar Credit here.

This post does not offer financial advice but explains simply the different types of way to borrow. So let's have a look at the different ways in which you can borrow money. 


An overdraft is part of a bank account that allows you to take out more money than you have available. There are two types, arranged overdrafts and unarranged. It's good to have a small overdraft facility to use in an emergency. The interest rate will usually be high on an unarranged overdraft, whilst an arranged overdraft interest rate will usually be much lower.

Guarantor loan

A guarantor loan is a type of unsecured loan that requires a guarantor to co-sign the credit agreement. This means that they guarantee payments if the person defaults on the loan. You both need to go through the application process and that can take time. They are useful for large loans and long term loans but both parties will need a credit check. 

Credit card

A credit card is a card that allows you to buy something and pay for it in the future. You can get interest-free credit on a credit card if you pay the credit back on time, so they are useful for short-term credit however long term credit can soon be costly. You may be able to get a good deal on a new credit card such as 0% interest for a set amount of time but there may be an arrangement fee. There can be a lengthy application process.

Credit union

A credit union is a financial co-operative which provides savings, loans and a range of services to its members. It is owned and controlled by the members. 
A credit union are not for profit so will generally have decent interest rates but a credit union may require you to have a savings account first and live in a certain catchment area to access their loans or savings accounts.

Family and friends

Borrowing from family and friends can be a great way to borrow if you have people you know that will lend you money, as often it is interest-free, however, tread carefully as there will be expectations on both sides. What happens if you can't pay it back on time? Will they expect payment once a month? Borrowing like this can strain relationships for sure but could be interest-free so you need to balance this up.

Credit line 

A credit line is an ongoing form of credit which you can use when you need to.  You pay interest on only the amount borrowed not the credit limit agreed. It is usually faster to open a credit line account than a credit card and it has a much lower rate than a payday loan but more expensive than an arranged overdraft. A credit line is useful in the short term and can be convenient to borrow if needed as you can access the credit limit almost immediately.

Payday loan

A payday loan is a short term unsecured loan often used in an emergency. They can be convenient but usually, they have very high rates of interest. If you do not pay the payday loan off as expected the companies charge a late payment fee and interest skyrockets.

With all types of borrowing ensure you can see the annual percentage rate to compare products (APR), check if there are any arrangement fees and the total cost of credit and ensure you have everything in writing. When you apply for credit it will be recorded on your credit report.  If you default on any repayments this will be recorded and may affect your credit score and your ability to access credit in future. 



  1. PayDay loans have been the bane of my existence but these are good ideas if you truly need it.

  2. This is a handy guide of the available options to you when you need a helping hand.

  3. I have to admit I’ve not heard of a credit line as a way of borrowing money before. It definitely seems like it would be of use to some people.

  4. Credit line seems like a great option for those trying who need the money and don't want to use the traditional methods of borrowing money

  5. Credit Line seems like a great option over some of the others listed. Thanks for highlighting! :)

  6. I think this post shows the differences between each option really well. Personally I'd avoid payday loans as the rates are so high and often push you further behind xxx