Understanding Your Alternative Finance Options

alternative financial options

Have you recently found yourself in a financial sticky spot? Don’t worry – you’re not alone. In fact, reports have shown that a quarter of Brits don’t have a single penny set aside in savings, and a third of us have to rely on credit cards to pay for emergencies. If you’re part of this large number of people who aren’t lucky enough to have surplus cash sitting around in a bank account, here are your alternative finance options.


Borrowing from a friend or family member

Your lowest risk option (though admittedly not a possibility for everyone) is to borrow money from your family and friends. It can be a little bit uncomfortable, so make sure you draw up an agreement about how much you’re going to borrow, the repayment terms and an interest rate everyone is comfortable with. Set up a standing order to make sure you pay them back on a specified date at regular intervals.  And then keep your commitments so as not to damage valuable relationships.


Bank loans

Banks will occasionally offer you an unsecured personal loan. This means that you’ll be loaned a sum of money without needing to ‘secure’ it against something you own, such as your house. However, because this kind of financing option is risky for the banks lending the money, rates aren’t very good (you might have to pay 20% interest for example), and you can only get one if you have a strong credit score.


Credit cards

A credit card can be a great way of getting access to money if you need it before your next paycheck  arrives. It works by letting you spend money on credit up to a pre-set amount, which could be anything from a few hundred pounds to several thousand pounds. It can be a relatively low risk alternative finance option if you’re the kind of person who will make sure they never miss paying off the credit card bill every month. Don’t withdraw money from a cash machine using it either, as it might charge you 4% or more to do so.   And bear in mind that this is only going to be an option if you have a good credit rating and are able to debit the required amount into it.

credit cards


Logbook loans


Logbook loans allow you to put an asset into the hands of a creditor – such as your car – in exchange for cash.   So long as you repay the loan and the interest in the manner agreed between you and the lender, you’ll get your car back and have benefitted from the money you needed. Logbook loans aren’t suitable for everyone, and some lenders are more responsible than others, but it can be a good option for people who are excluded from finance due to a poor credit rating. Or, those who can’t go down a conventional route such as borrowing from a bank.

Alternative Finance Options Are A Bridge to The Future

Ultimately, it’s important to not beat yourself up about not having enough money right now. Sometimes unexpected bills can occur and you need money quickly.  It doesn’t mean  you failed yourself or let your family down if you need to borrow money! So, choose the option that’s right for you and get started on the path towards feeling more in control of your finances.

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