Finance Companies, Loans and Credit

Sixpence Support UK does not lend money, does not arrange credit and receives no commission from any bank or finance company. We do not recommend any particular lender. This page is general information for the whole UK, not financial advice.

“Credit” covers many things: overdrafts, credit cards, personal loans, car finance, hire purchase, store credit, buy-now-pay-later, doorstep lending and credit union loans. The cost and your protections differ between them.

• Ask whether you need to borrow at all, and whether a grant, benefit or help scheme could cover the cost instead.
• Compare the APR — the yearly cost including interest and compulsory fees.
• Check the total amount repayable, not just the monthly payment.
• Check how long the agreement lasts. A low monthly payment over many years can cost far more.
• Check whether the interest rate is fixed or variable.
• Read what happens if you pay late, pay early, or want to end the agreement.
• With car finance, check whether you own the car at the end, and any mileage or condition charges.
• Never borrow to repay other borrowing without getting free debt advice first.

A credit union can be a lower-cost option. You can search for one at Find Your Credit Union.

Lenders must check that borrowing is affordable, but you should do your own check too. Work out what is left after rent or mortgage, council tax, energy, water, food, travel, insurance and essential costs. Only what remains is genuinely available for repayments.

• Leave room for a change in circumstances, such as illness or reduced hours.
• Be honest on the application. Misleading information can invalidate the agreement.
• Watch buy-now-pay-later and multiple small agreements adding up.
• Check your credit record with a credit reference agency before applying, so you can correct mistakes.

• Interest rate and APR, and whether a promotional rate ends.
• Arrangement, broker or documentation fees.
• Late payment and missed payment charges.
• Early settlement charges.
• Default interest that applies if you fall behind.
• Charges for changing the agreement or ending it early.
• Add-ons sold alongside the loan that you may not need.

For most credit agreements you have 14 days to withdraw after signing, although you must repay what you borrowed plus any interest for the days you had it.

Firms that lend to consumers, broker credit or manage credit agreements in the UK must normally be authorised by the Financial Conduct Authority. Lending without authorisation is illegal.

• Search the firm on the FCA Register and check the contact details match those the Register shows.
• Check the FCA Warning List.
• Be careful with brokers that charge a fee before finding you a loan.
• If money is lent illegally, you can report a loan shark. In England, contact the Illegal Money Lending Team on 0300 555 2222, and see Stop Loan Sharks. Scotland, Wales and Northern Ireland each have their own team, reached through Trading Standards or the police.

Money you hold in a UK-authorised bank, building society or credit union is normally protected by the Financial Services Compensation Scheme up to a set limit per person, per banking group, if the firm fails. Check the current limit and which firms share a licence on the FSCS website.

• An “advance fee” you must pay before a promised loan arrives.
• Guaranteed approval with no checks, or loans offered by text, social media or messaging apps.
• Requests to pay by bank transfer, gift card or cryptocurrency.
• Pressure to decide immediately, or to keep the arrangement secret.
• Callers claiming to be your bank asking you to move money to a “safe account”. Genuine banks never do this.
• Firms promising to write off debts or reclaim money for a large up-front fee.

Report fraud to Action Fraud (in Scotland, Police Scotland on 101), and tell your bank straight away. See also Scams, Fraud and Suspicious Messages.

Act early — you have more options the sooner you ask for help, and free advice is available the same week.

• Pay essential bills first: rent or mortgage, council tax, energy, water and food.
• Tell the lender you are in difficulty and ask what support they can offer, such as a reduced payment or a short pause.
• Ask to be treated as a customer in vulnerable circumstances if illness, disability, bereavement or caring is involved.
• Get a free income and expenditure check done by a debt adviser before agreeing to any new payment plan.
• Do not take a new loan to cover repayments on an old one.
• Do not pay for debt help. It is free from charities and Citizens Advice.

Free debt help: National Debtline 0808 808 4000 (England, Wales and Scotland), StepChange 0800 138 1111 (UK-wide), Advice NI 0800 915 4604 (Northern Ireland). If court papers or enforcement letters have arrived, see Debt Collectors and Bailiffs.

• Complain to the firm first, in writing where possible, and keep a copy.
• Explain what went wrong, how it affected you, and what you want put right.
• The firm should normally give a final response within eight weeks.
• If you are unhappy, take the complaint free of charge to the Financial Ombudsman Service — 0800 023 4567. You usually have six months from the final response.
• You do not need a solicitor or a claims management company, and you should not pay a fee.

Our Letter Support service can help you write or understand a complaint letter.

• MoneyHelper — free and impartial money guidance, backed by government.
• Citizens Advice — England and Wales, with separate services in Scotland and Northern Ireland.
• National Debtline — free debt advice. 0808 808 4000.
• StepChange Debt Charity — free debt advice UK-wide. 0800 138 1111.
• FCA Register — check a lender or broker is authorised.
• Financial Ombudsman Service — free, independent complaints service.
• Find Your Credit Union — lower-cost community lenders and savings.

• Insurance Advice and Support — choosing cover and complaining.
• Debt Collectors and Bailiffs — your rights if someone is chasing a debt.
• Benefits and Pensions — help if your income has changed.
• Find Local Services — official finders for nearby help.

This page is general information for the whole UK and is not financial or legal advice. Interest rates, protection limits and some consumer rules change over time, and parts of debt law differ in Scotland and Northern Ireland. Please check the official links above and speak to a free adviser about your own situation.