loanBank loans can be an expensive form of credit. You might think that you’re applying for a loan from a responsible organisation, but once you’ve taken administrative fees, interest rates and other costs into account, your bank loan could turn out to be as expensive as a payday loan. Here are some reasons why you might look elsewhere for financial help.

1. Logbook loans

If you’re looking for a speedy response to your short-term loan application then a logbook loan from CarCashPoint may provide the solution. You will use your car as security and borrow against the value of your vehicle. Terms and conditions are clearly stated on the website and you are able to repay the loan in small regular segments. Once you’ve repaid the loan, you’ll regain ownership of your car.

2. The credit score dominates everything

If you’ve ever been late in paying a bill or married to someone who has debts, then you’re in for a shock the next time you look at your credit score. Every delayed payment will reduce your credit score and this can cause problems if you apply to a bank for a loan.

3. Your credit card may be cheaper than a bank loan

The website Money Saving Expert suggests that borrowing money from a credit card may be cheaper than borrowing from a bank. It all depends how much you need to borrow. The mule card allows you to ‘move money from your 0% debt from other cards and put it into your bank account and use it as cash.’ You will have to get a special money transfer card otherwise you could incur large fees.

4. Bank APRs are expensive

Most high street banks charge representative APRs of 14.9%. This is exorbitant compared with the amount of interest earned on savings accounts, if you can find an alternative to a bank loan, you could save some money.

5. Face to face is better

Your friendly bank manager, who understood you and your business, has all but disappeared. Current banking decisions rely on computer algorithms and quotas from the bank’s head office. According to the website The Money Advice Service a credit union might be a better option. These organisations are smaller and friendlier and will do their best to help you in an emergency.

6.Carry out your own research

Banks are in the business of selling just as much as shops or other retail outlets. Before applying to your bank carry out your own research. The bank may be trying to sell you an expensive business loan when an alternative form of credit might suffice.

7. Charges, fees and other costs

 Banks are expensive. An article from 2014 in The Daily Mail revealed that Barclays bank had raised its overdraft and loan charges, leading to customer complaints. Always check charges before applying for a loan or overdraft. A spokesman for Barclays suggested that the ‘daily fees are less confusing than APRs.’ The customer who ended up seeing charges rise from £1.50 per month to £15.00 might not agree.