To borrow over a longer period, a loan with regular monthly repayments might be more appropriate.

 

It is vital that you consider carefully whether you can afford to take on (or service) any borrowing. The best way to do this is to draw up a budget plan of income and expenditure. By adding up all your monthly income and deducting your monthly outgoings, you will get a clear picture of any money left over at the end of each month that can be used towards making repayments. Allow for any incidental expenses by leaving some surplus at the end of each month.

This does not mean that you should borrow simply because you can afford to. Equally, you are under no obligation to accept credit that may be offered to you, but you feel that you do not need. By planning ahead and borrowing money carefully, you should avoid ending up with more commitments than might be strictly necessary and risk being unable to afford to borrow more money when you really need it.

If you are unsure whether you can afford to borrow, you should talk to your bank or financial adviser about your personal circumstances to make sure that you do not become over committed.