Cheapest credit cards, loans or grants – where to borrow money if you need extra help during coronaviris crisis
IF you're struggling to get by due to the coronavirus crisis, borrowing cash might feel like your only option.
But you should use it as a last resort and make sure you choose the right product for you, or you could find yourself paying more than you need to.
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She added: "A 0 per cent purchase credit card may be an option for some to consider as this does not commit them to taking out further credit immediately.
“For those who have a need to borrow a larger amount of money, then one benefit of a loan would be a set repayment schedule with a fixed end date.
"This would mean they can be confident that the debt will be repaid in full after a period of time.
Instead some providers could offer you a deal with a shorter period.
This card from Barclaycard comes with a 0 per cent deal of up to 27 months on purchases.
You also don't have to pay interest for 27 months on balance transfers, although a 3.5 per cent fee applies.
If you don't clear your balance by the end of the 27 months, you 'll be charged 21.9 per cent in interest.
Sainsbury's credit card comes with a 0 per cent purchase and balance transfer period of 26 months, so you can pay down your existing debt and stop incurring interest for over two years.
Just keep in mind that it comes with a balance transfer fee of 3 per cent, at a minimum of £3.
After the 0 per cent period comes to an end, the card will revert to an APR of 20.9 per cent on purchases.
If you give your Nectar card number when you apply, you'll get 750 bonus Nectar points worth £3.75 each time you spend at least £35 at Sainsbury's in the first two months up to a maximum of 7,500 points.
MBNA also offers an interest-free period on both balance transfers and purchases for 26 months.
Just make sure you pay off any debts before the 26 months are up, or you'll have to pay 20.9 per cent in interest.
If you're transferring debts, you'll also pay a 5 per cent fee on the balance.
How do I check my credit report?
TWO thirds of Brits have no idea what their credit score is, so it's worth checking yours to see if you need to improve it.
All three CRAs offer you the chance to view your score, report and more for a monthly fee BUT you can get hold of your score for free without paying for a subscription.
Experian - Sign-up to its CreditMatcher service which will give you access to your score and help you shop around for deals you are likely to be accepted for. If you want access to your full report you'll pay £14.99 a month after a 30-day trial period ends.
Equifax - You can get your Equifax report AND score through a website called Clearscore. If you go to Equifax directly you'll pay £14.95 a month after its 30-day free trial.
TransUnion (formerly Callcredit) - You can access your TransUnion credit report through (formerly Noddle). It it will offer you credit cards and loans that you qualify for, though you don't have to apply for anything to use the free report service.
The best credit cards if you have a poor credit score
If you have large amounts of debt or missed payments, chances are you won't have the best credit score.
Purchase APR: 24.9 per cent
Cash withdrawal interest rate: 24.9 per cent
Credit limit: £1,200
Purchase APR: 27.5 per cent
Cash withdrawal interest rate: 39.94 per cent
Credit limit: £1,200
Cheapest loans
Some lenders have stopped allowing applications or increased rates due to the coronavirus, and others have tightened acceptance criteria.
Remember that the deal you'll get will depend not just on your credit history but the loan provider's criteria.
All loan rates are "representative", which means that only 51 per per cent of successful applicants have to get the rate, so you could successfully apply but get a more expensive deal.
Once again, you can check which loans you’re likely to be accepted for without damaging your credit score by using
Monthly repayment: £146.17
Total amount payable: £5262,12
Interest payable: £262.12
Monthly repayment: £146,39
Total amount payable:£5270,04
Interest payable: £270.04
- Hitachi Personal Finance APR 3.50 per cent -
Monthly repayment: £146,39
High cost credit loans
If your credit rating isn’t so great and cheaper borrowing may not be an option for you, you may be tempted by other forms of high cost credit, such as a payday loan.
It could seem like a quick fix if you’re only going to have to cope with a drop in income for a couple of weeks.
But these forms of credit can work out to be very expensive and you need to think very carefully before you decide to borrow in this way.
If your income has gone south due to the coronavirus crisis, you're also unlikely to pass the affordability criteria required.
Instead, you should make sure to apply for every bit of government help you can get.
If you must apply for high cost credit, you should apply for the one you're most likely to get accepted for and not focus on the rate, she added.
Government and charity grants
Government support for workers
If you're facing a drop in income because your employer has had to temporarily lay you off, your boss might put you on the coronavirus job retention scheme.
It means that the government will cover up to 80 per cent of your wage - up to £2,500 a month.
If you’re self-employed, the income support scheme might cover up to 80 percent of your profit based on previous tax returns for three years.
But it’s likely you will have to wait a while for this money if you’re eligible.
It can also help you check if you’re eligible for benefits or other grants that could help to improve your situation.
These are the banks that are giving mortgage holidays and bigger overdrafts if you’re struggling due to coronavirus.
Plus, here's how to get help paying bills.
Train passengers will get refunds on tickets as rail operations have been taken over by the government.