A guide to borrowing

Overdrafts, credit cards, loans

 All of us need a little extra help at times. So if you want to borrow money for a new car or kitchen makeover, or just need a little flexibility each month, then we're here to help. Take a look at our three lending options - they give you the choice of borrowing large or small amounts to suit your budget.

Our overdrafts - allow short term access to extra money when you need it. It costs nothing to set up an overdraft and you'll only pay when you use it.

Our credit cards - offer a simple, flexible way to manage your everyday spending and consolidate balances from other credit or store cards, with flexible payment options.

Our loans - ideal if you want to borrow a one-off lump sum and budget for fixed repayments.

Please be aware that there are alternative lending products such as mortgages that are secured against your home.

We want to make sure you're comfortable with the amount you borrow and that you're confident about paying it back. So it's worth asking yourself a few questions before you decide:

• What will my repayments be?
• Can I afford to pay the money back?
• Are my circumstances likely to change?
• Will I be able to afford bigger repayments if interest rates go up?
• What features or benefits will I get?
• Are there any risks and what happens if I can't pay back what I borrow?

APR
APR stands for Annual Percentage Rate. The figure is based on the interest rate, how you repay the amount borrowed (the term of the credit or loan, timing and repayment amounts) and other fees and charges. So it can help to compare APRs for similar products borrowed over the same length of time. The APR won't always include all fees and charges-you may still need to pay missed or late payment charges, or balance transfer fees for credit cards for example.

EAR
EAR stands for the Equivalent Annual Rate. This is the actual interest rate of an overdraft. It doesn't take account of any fees or charges.

Credit scoring
When you apply to borrow money, many lenders will use a credit score to help them make a decision on whether to lend the money or not. When you apply to us, your score might be based on what we know about your existing accounts with us, and information from other credit reference agencies. With a good credit history and payment record you're likely to be given a good credit score. If you've had many credit cards and loans, have missed payments and made lots of loan applications you may gets a lower score. A low score may mean you're lent less money, given a higher interest rate or your application is turned down.

We're here to help in any way we can. If you have a hearing or speech impairment you can use Typetalk whenever you contact us, or can use Textphone on 0845 603 1393 (lines open 7 days a week, 9am-9pm). We can also provide documents in large print, Braille or on audio. Please ask a member of staff if you'd like to know more.

Cards, loans and bank accounts are provided subject to status to UK residents aged 18 or over. If you don't keep up payments or stay within your agreed limits, this may affect your ability to obtain additional credit and you may also get additional charges.

Our aim is to please, but we know that sometimes things go wrong. To complain, please call 08457 25 35 19. Our promise is to do our best to resolve any problem you have, but complaints that can't be settled may be referred to the Financial Ombudsman Service.

We may monitor or record phone calls.

We subscribe to the Lending Code, copies of the code can be obtained from www.lendingstandardsboard.org.uk Authorised and regulated by the Financial Services Authority except for lending for which we are licensed by the Office of Fair Trading. Halifax is a division of Bank of Scotland plc. Registered in Scotland No.SC327000

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Typically used for: an unexpected bill or an essential repair. It's a convenient way of accessing extra money when you need it quickly.

An overdraft is where we let you spend more money than you have in your current account. We'll agree a planned overdraft limit with you and this is the amount you can use.

If you've an unexpected expense or things are looking a bit tight, an overdraft can help tide you over until your next pay day when your account will go back into credit.

An overdraft can be planned or unplanned:

• Planned - you agree a borrowing limit with us in advance. So you only pay a set daily fee for the days you're overdrawn. If you don't go overdrawn there'll be no fees to pay.
• Unplanned - where you spend more than your planned overdraft limit and so you'll pay a higher daily fee. One way to avoid this is to make sure you have an appropriate planned overdraft

Overdrafts at a glance:

• Can help tide you over until your next pay day.
• You only pay on days you use it.
• Quick access to money for unexpected bills.

Find out more about our bank accounts. 

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Typically used for: short-term borrowing for everyday things like groceries and petrol, or for a larger purchase-like a holiday or a new TV. It can even be used to consolidate balances from other credit and store cards.

Our credit cards can help you manage your money by spreading the cost of your everyday spending and providing a secure way of payment. You can use credit cards to buy goods and services, in shops, by telephone or online.

As with all credit cards, most purchases made above £100 have protection through Section 75 of the Consumer Credit Act 1974, meaning if there's an issue with your suppliers, you may be able to claim a refund from us. Our credit cards also let you transfer balances from other credit and store cards-which you may want to do if you're paying a higher rate of interest on those cards. We'll send you a statement each month showing your outstanding balance. You can choose how much of your balance to pay off-from the minimum payment to the full balance-and you can even set up a monthly direct debit for an amount that suits you.

If you only use your credit card for purchases and you pay your balance in full and on time each month, you'll not pay any interest (however, if you've transferred balances and aren't in a promotional period, or have taken out cash, interest will be charged even if you pay your balance in full). You should also be aware that interest rates are variable and may change.

Credit cards at a glance:

• Flexible borrowing within an agreed credit limit with monthly repayments.
• Manage the cost of everyday spending-we won't charge interest on the purchases you make as long as you pay the full balance on time every month.
• Consolidate balances from other higher rate credit or store cards.

Find out more about our credit cards. 

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Typically used for: one-off larger items or long-term plans-perhaps a car or new kitchen, a family wedding or simply reorganising your finances.

If you're planning to make a bigger purchase and don't have all the money you need, then a fixed rate loan can help. It can also provide a simple and cost effective way to manage your existing debt.

We lend you a lump sum that you'll pay back in fixed monthly repayments by direct debit, together with interest, over a number of years. And because your repayments stay the same each month they're easier to budget for. You can choose your term-you could have a longer repayment period so that the monthly payments are lower-but more repayments mean you'll pay back more in interest.

To find out what you can comfortably borrow, visit our loans section and try out our Quick Calculator You'll need to keep up payments on your loan to avoid extra charges.

Loans at a glance

• Larger amounts up to £25,000 for one-off purchases or long term plans.
• Planned long-term borrowing at a fixed rate over a number of years.
• Fixed monthly repayments are easier to budget for.

Find out more about our loans.

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