Whether you’re new to borrowing or struggling to find credit, we can help you work out what option may be best for you.

There are many ways to borrow money to help you buy something, but you usually need to be 18 or over. (It is illegal for anyone to send documents offering credit to someone under 18, and you can report this to your local Trading Standards – see Related links.) Bear in mind you will have to pay interest on what you borrow, which means that you’ll pay back more than you actually borrowed. There may also be extra charges.

Here, we explain how loans work, how they differ and how to borrow sensibly. We also explain why you should avoid illegal lenders (also known as loan sharks). If you’re looking to borrow money to buy a home, then see our Mortgages section.

The law says firms lending money to customers must be licensed by the Office of Fair Trading (OFT). It requires credit agreements to be set out in a particular way and to contain certain information.

Check with the OFT if a firm is licensed – see Related links. You only have protection if things go wrong if you deal with a licensed firm.

For useful tips on borrowing see the Consumer Direct website in Related links.