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What Finance is Best For You


Finance is a broad term – there are so many options available to you. From store cards to instalment loans for bad credit, there’s no shortage of how you can get credit. Regardless of your credit rating. But what finance is best for you? Here’s a summary of the various options available to you and which ones are the best choice.

Bank Loans

A bank loan is paid off in instalments over a set period of time. This could be anything from 12 months to 7 years. Mortgages are effectively a bank loan used solely to buy a house. It’s secured against your home and paid off in monthly instalments via interest-only payments or fixed payments. You can also take out a bank loan that isn’t classed as a mortgage. The rates can be very fair but are dependent on your credit history. For example, if your credit score is low then you’ll pay extortionate interest rates – that’s if you even get accepted because banks are very strict with who they give loans to.

Short Term Loan

If you go with a reputable company like My Financial Broker, you’ll find that short term lenders can offer great customer service and fast payout times. The best short term loan lenders like those we work with are extremely transparent with costs and interest rates, so there are no shock-surprise fees. Reputable lenders are authorised by the Financial Conduct Authority (FCA). So they always make it clear how much you’ll pay back, as well as any potential late payment fees.

Short term loans are recommended for people with a secure, regular income who need a bit of extra cash to cover emergency or unexpected expenses. This could be things like car breakdowns, fitting a new boiler, emergency prescription and so on. Short term loans are designed with you in mind. So if you take one out responsibly it’s really easy to pay them back and it could give your credit rating an amazing boost.


All banks offer an overdraft facility, but you usually have to apply with them to get it (unless you have a student account!). If authorised, your bank sets your overdraft limit. So when you go past ‘0’ on your account you’ll have a financial cushion to fall on. But if you go over your overdraft it can be very costly in the long run – as the bank will charge you unplanned overdraft fees.

The size of your overdraft will depend on your bank account activity and your needs. For example, you may get a £500 overdraft if your bank account shows you have a healthy regular income and little to no debts. But if your bank account shows a lot of debt and little or no income then you’d be refused. Banks are fairly strict with overdrafts so they’re not really suitable for those looking to build credit. They are not really suitable for those with a poor credit history either.

Credit Cards

Credit cards are flexible in terms of who can successfully apply for one. From credit builders to exclusive cards for businesses, there’s one of nearly every financial background. However, they do come with very high interest rates and you’ll most probably be charged a fee if you want to withdraw cash. This can all add up in the long-term and should be used very responsibly.

group of credit cards

Peer to Peer Lending

This is where you apply for a loan from an online community. You’re effectively borrowing a real person’s money. The lenders on peer to peer lending sites use them to earn interest on their savings. But there are a few disadvantages to using peer to peer lending – you’ll need a fairly high credit rating to use the service. There are also several downfalls for the lenders too – you may need to lock in your cash for a minimum of one year and you probably won’t’ be covered by the Financial Services Compensation Scheme (FSCS).

Guarantor Loan

You’ve probably heard of having a guarantor for your rent. This is where someone you know signs your tenancy contract and pays any outstanding rent if you can’t. A guarantor loan is pretty much the same! Typically, your guarantor must be a homeowner in full-time employment. He or she will cover the repayments of your loan if you can’t. It can be a good alternative for those who have a poor or very poor credit rating. But it can be damaging to your relationship with the guarantor if you don’t keep up with payments. My Financial Broker can help you find fast loans for poor credit with no guarantor if you’d rather not have to find a family member or friend to secure credit.

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