Don't pay through the nose for quick cash

A fifth of adults would struggle to lay their hands on £100, while a third would have to dip into savings to cover household emergencies. This might explain why thousands of households are turning to expensive short-term loans in an attempt to keep up with debt repayments and pay bills.

Research by Moneysupermarket.com, the comparison website, shows that there has been a 130 per cent increase in applications for such loans since last August. So-called payday loans can be credited to a bank account within 24 hours, but they come with exorbitant interest rates. Borrowing £100 for 30 days costs £25 - an AER (annual equivalent rate) of 1,286 per cent.

Even consumers with the healthiest of incomes can get caught out occasionally, but there are cheaper ways to get hold of cash in a hurry. Here Times Money highlights some of the alternatives.

As long as you do not ask too often, your nearest and dearest should be happy to help you out of a tight spot without charging hefty fees or a penny in interest. Tim Moss, head of loans at Moneysupermarket.com, says: “You should swallow your pride and ask parents or friends for money before considering the alternatives. Informal borrowing is the most common way that people get hold of cash quickly, and if your relatives are nice enough it should not cost you anything”.

news source : http://business.timesonline.co.uk/