What are your options?

If you want to borrow less than 1,000 you have several options:

Each has different pros and cons, affects your credit record in different ways and costs varying amounts of money.

Should you ever get a payday loan?

Short term or payday loans are very expensive and can damage your credit record so should only ever be used as a last resort.

The options below are cheaper and better for your credit record than a payday loan, so investigate each one first.

Personal loan

  • Regular repayments

  • Can improve your credit record

  • Quick to apply for

  • Only for sums over 500

  • More expensive rates

  • Need strong credit to apply

You could borrow between 500 and 35,000 using a personal loan, so it is still worth considering even if you only want to borrow a small amount.

  • How much does it cost? You may have to pay a higher rate for a smaller loan because the best rates are for larger loans, normally between 7,500 and 15,000. Some lenders do not lend less than 1,000 too, so you may have less choice.

  • How long will it take? Small loans are no quicker than larger loans. After you apply you should know within 24 hours if your application has been approved, and then the money could be within your account in one or two days.

  • Your credit record: You need a strong credit record to get the best rates. The loan will appear on your credit report and may limit how much more you can borrow, but manage your loan well and it will improve your credit record.

If you have a poor credit record then you could apply for a guarantor loan instead of a standard personal loan, but you will need the help of a friend of family member.

You could also look at bad credit loans. They are more expensive than standard personal loans, but are more likely to consider your application if you have had credit issues in the past.

Credit card

  • Cheap option if you get a 0% card

  • Can improve your credit record

  • Quick to apply for

  • Can take a while for a card to arrive

  • Need strong credit for best cards

  • Withdrawing cash is very expensive

A credit card could be a quick and easy way for you to borrow a small amount of money.

Most cards offer credit limits of several hundred pounds or more and you can choose to borrow exactly the amount you need.

  • How much does it cost? With a 0% purchase card you can avoid paying any interest. Alternatively, you could transfer cash into your account for a small fee with a 0% money transfer card. Withdraw cash from your card though and it is very expensive.

  • How long will it take? If you already have a credit card you can use it straightaway while a 0% money transfer normally takes around two to three days. If you need to apply for a new card then it could take over a week to arrive in the post.

  • Your credit record: You need a strong credit record to get the best cards. All credit cards appear on your credit report but if you use them sensibly, make your payments on time and stay within your credit limit they can help improve your credit history.

You can also check which credit cards you are likely to be approved for without affecting your credit record.


  • Flexible

  • Some banks offer 0% rates

  • Quick if you have existing account

  • Need a strong credit record

  • High fees if you go over your limit

  • Need a bank account

With an approved overdraft you can borrow from your bank account by withdrawing cash or using your debit card.

  • How much does it cost? Some banks offer 0% overdrafts for small amounts, which can make this one of the cheapest ways to borrow. Standard overdraft rates are around 15-20% APR but other fees may apply, you can compare costs here.

  • How long will it take? If you already have a bank account, an overdraft could be added the same working day. If you have bad credit or a low income, it can take longer.

  • Your credit record: Your overdraft will be added to your credit record once approved which could reduce how much you can borrow. If you stay within your limit though and manage your overdraft well it will improve your credit record.

Friends or family

  • Can be cheapest option

  • No impact on your credit record

  • You can agree a loan term

  • Need willing friends or family

  • No formal loan terms or rights

  • Owe money to friends or family

Asking to borrow money from friends or family could be cheap and flexible, but it is not always the best option.

  • How much does it cost? This all depends on what you agree with the person lending you the money, but borrowing from friends or family could be your cheapest option.

  • How long will it take? If the person you are borrowing from has the money available it could be the quickest option. Equally if they need to transfer or borrow the money themselves it may take longer.

  • Your credit record: Friends and family are less likely to worry about you credit record and borrowing from them will not show on your credit record so will have no positive or negative bearing on your credit history.

If you are thinking of asking to borrow money from a friend or family member, here is what they need to do to set up your loan to make sure you are both happy.