Before you borrow
Alternatives worth checking first
Options that may cost less than credit, including help you do not have to pay back.
Written by the UKPayday editorial team
Updated 22 July 2026
14 min read
The short version
- Some support does not need to be repaid.
- Suppliers can often move or split a payment.
- Benefits, grants and council help are widely missed.
- Borrowing should be the last option, not the first.
A loan is not always the quickest or cheapest way to solve a short term money problem.
You may already have access to support through a benefit, your employer, an insurance policy, a service provider or your local council. Some options do not need to be repaid. Others may give you more time to pay or provide borrowing at a lower cost.
Checking these options first can prevent an urgent expense from becoming a longer debt.
Availability depends on your circumstances and where you live. There is no guarantee that every option will be open to you, but a few careful checks could save a significant amount.
Decide whether the cost must be paid now
Start with the expense itself.
Ask whether it is essential, whether it must be paid today and what would happen if it were delayed. A broken fridge, urgent travel cost or overdue energy bill needs a different response from a purchase that can wait.
If the cost is not essential, postponing it is usually cheaper than borrowing. You avoid interest and do not create another payment for a future month.
If it is essential, ask the supplier whether the payment can be delayed, divided into smaller amounts or covered through another form of support. Do this before accepting credit.
Check money you already have
If you have savings, compare the effect of using them with the full cost of a loan.
Savings usually earn less interest than high cost credit charges. Using some savings may therefore cost less than borrowing. However, do not leave yourself unable to pay rent, food, energy or another essential cost.
Check other accounts and balances too. You may have money in a separate savings pot, a refund due, store credit, loyalty value or an account you no longer use.
Make sure the money is actually available. Do not spend funds reserved for tax, rent or another bill that will still need to be paid.
Ask whether insurance or a warranty covers the cost
An unexpected expense may already be covered.
Check home insurance, contents insurance, vehicle cover, breakdown membership, travel insurance, packaged bank account benefits and product warranties.
Examples could include:
- Emergency home repairs
- A broken appliance
- Vehicle recovery
- A cancelled journey
- A lost or damaged phone
- Legal assistance
Read the policy terms and check the excess. An excess is the amount you must contribute to a claim. If the excess is close to the cost of replacing the item, claiming may offer little value.
Also check whether the manufacturer, retailer or installer is responsible. Paying for a replacement before checking your rights could mean spending money unnecessarily.
Contact the company you need to pay
If the money is needed for a bill, speak to the organisation before taking a loan.
Energy companies, water providers, councils, landlords, mortgage lenders, mobile networks and other creditors may have support for customers in financial difficulty.
Depending on the bill and your circumstances, they may consider:
- Moving the payment date
- Dividing the amount over a longer period
- Agreeing a temporary reduced payment
- Reviewing your tariff
- Checking whether you qualify for a grant or support fund
- Referring you to free debt advice
These options are not guaranteed. Any change should be confirmed in writing, including how it affects future payments, interest, arrears and your credit file.
Do not agree to a payment plan that leaves you without enough for essentials. A smaller bill payment may help, but only if the complete arrangement fits your budget.
MoneyHelper explains the support that may be available when you are struggling to pay household bills.
Check every benefit you could receive
Many people miss support because they assume they will not qualify.
Entitlement can change when your income, health, employment, housing or family circumstances change. Being employed does not automatically prevent you from receiving help.
Possible support can include help with income, housing, children, disability, caring responsibilities and Council Tax. The exact benefits and rules depend on your circumstances and location.
Use a reliable benefits calculator and enter complete information. MoneyHelper provides a free and confidential benefits calculator that can identify benefits, grants, cheaper tariffs and other support you may be missing.
An online result is only an estimate. If your situation is complicated, ask a welfare rights adviser, Citizens Advice or another qualified service to complete a full check.
Help available through Universal Credit
If you receive Universal Credit, you may be able to request an advance or other financial support in certain circumstances.
Different advances exist for different needs. A new claim advance can help while you wait for an initial payment. A Budgeting Advance may be available for certain essential or unexpected costs once the eligibility conditions are met.
An advance is not extra benefit money. It normally has to be repaid through deductions from later Universal Credit payments.
This means your future monthly income will be lower for a period.
Before accepting, check:
- How much you will receive
- How much will be deducted
- When deductions will start
- How long they will continue
- Whether the reduced benefit will still cover essential costs
GOV.UK explains the current options for a Universal Credit advance and other support.
An advance may cost less than commercial credit because interest is not normally charged, but the later deductions still need to be affordable.
Budgeting Loans for people receiving certain benefits
A Budgeting Loan is an interest free government loan for some people who receive qualifying benefits.
It can help with specified essential costs such as furniture, household equipment, clothing, moving expenses, maternity costs, funeral expenses or items needed for work.
Universal Credit customers cannot receive a Budgeting Loan. They may be able to apply for a Budgeting Advance instead.
Eligibility, amounts and repayment rules apply. Check the current Budgeting Loan criteria before relying on this option.
Interest free does not mean repayment free. Deductions from benefits can reduce the money available for normal living costs.
Ask your local council about emergency support
Councils may provide help with food, energy, housing costs and essential household items when someone faces a financial emergency.
The name and rules of the scheme depend on where you live. In England, support is available through the Crisis and Resilience Fund from April 2026, with local councils deciding how their schemes operate. Scotland, Wales and Northern Ireland have their own forms of crisis or discretionary support.
You may not need to receive benefits to qualify. Awards are not guaranteed and local rules can differ.
Use the GOV.UK service to find help from your local council. Apply as early as possible and provide any evidence requested.
Some help is provided as a grant, voucher, item or direct payment to a supplier rather than cash. If support does not need to be repaid, it will normally cost less than a loan.
Look for grants
Charities, professional bodies, trade unions, employers, energy suppliers and community organisations may offer grants.
Support can be linked to:
- Your current or previous job
- An illness or disability
- Caring responsibilities
- Military service
- Where you live
- Religious or community membership
- A particular emergency
A genuine grant does not normally need to be repaid. Eligibility can be narrow and applications may take time, so it may not solve every immediate need.
MoneyHelper recommends checking charitable grant search services when income has fallen or an unexpected event has occurred. Do not pay a business simply to search for grants without checking whether the same service is available free.
Check social tariffs and reduced charges
Some providers offer lower tariffs to customers receiving certain benefits or living on a low income.
Social tariffs may be available for broadband, mobile phone and water services. Energy suppliers may have separate support funds, affordable payment options or help for vulnerable customers.
A lower tariff may not produce cash today, but reducing a regular bill can solve the monthly gap that caused you to consider borrowing.
Contact the provider directly and ask what evidence it needs. Do not assume the cheapest support tariff will appear on a general comparison website.
MoneyHelper has current information about social tariffs and cheaper bills.
Ask your employer what support exists
Your employer may offer support that you have not used before.
This could include:
- An employee assistance programme
- A hardship fund
- Help with travel or work equipment
- A payroll linked credit union
- A salary advance
- Access to wages already earned
- Financial guidance
Ask human resources or payroll what is available and whether there are fees, tax effects or eligibility rules.
A salary advance gives you part of your pay early. It can appear cheaper than a loan, but your normal payday will then be smaller. Some services also charge a fee each time they are used.
If you need an advance repeatedly, it is moving the same income between dates rather than fixing the shortage. MoneyHelper explains the risks in its guide to salary advances and earned wage access.
Borrowing from family or friends
Someone you trust may be able to lend money without interest. This can cost less than commercial borrowing, but it can place strain on the relationship.
Be clear about:
- The amount being borrowed
- Whether any interest will be charged
- The repayment amount and dates
- What happens if a payment is late
- Whether the person can genuinely afford to lend it
Put the agreement in writing, even when the relationship is close. Do not promise a repayment that your budget cannot support.
Never pressure someone to lend money or accept money they need for their own essential costs.
Sell an item rather than borrow against it
Selling something you no longer need may raise money without creating a repayment.
Compare realistic sale prices and use a safe platform. Be cautious if you are selling an item that would be expensive to replace later.
Selling is different from pawning an item. A pawnbroker provides credit secured against the item. Interest and charges apply, and the item can be sold if the loan is not repaid. Read the full agreement before considering this type of borrowing.
Consider a credit union
If borrowing remains necessary, check whether you can join a credit union.
Credit unions are member organisations that provide savings and lending services. Membership can be based on where you live, where you work or another shared connection.
Their loans can cost less than many forms of high cost credit. Approval is not guaranteed, and some credit unions require membership or savings before you can borrow.
Compare the APR, repayment amount, loan term and total repayable. A lower rate does not make a loan affordable if the payment does not fit your budget.
MoneyHelper provides guidance on borrowing from a credit union.
Check regulated community lenders
Some responsible finance providers and community lenders offer credit to people who may not meet mainstream bank criteria.
Their rates and conditions vary. They may cost less than some high cost lenders, but they still charge for borrowing and still complete affordability checks.
Check that the lender is authorised on the Financial Services Register. Compare the total repayable and look for any compulsory membership or account fees.
Do not assume that the words community or responsible automatically mean the cheapest option.
Existing bank credit may cost less, but check first
An arranged overdraft or existing credit card may sometimes cost less than a new short term loan. It can also cost more, depending on the rate, fees and how long the balance remains unpaid.
Before using one, check:
- The interest rate or APR
- Any transfer or cash withdrawal fee
- The minimum monthly payment
- When interest starts
- How long repayment will take
- The total expected cost
Credit card cash withdrawals are often expensive and may start charging interest immediately. An unarranged overdraft can also create problems. Do not move money without understanding the charge.
A zero interest offer can be useful only if it covers the transaction you need and the balance can be cleared before the offer ends. Never assume another promotional offer will be available later.
Avoid buy now, pay later as a quick fix
Buy now, pay later can delay or divide the cost of a purchase. It does not create extra income and it is still a financial commitment.
Several small agreements can become difficult to track. Missing a payment may lead to charges, collection activity or an effect on your credit file, depending on the product and provider.
Use it only after checking the payment dates against your budget. It is not a suitable way to cover an ongoing shortage in essential living costs.
Get free debt advice before borrowing for bills
If you need a loan to pay rent, energy, Council Tax, food or repayments on other debts, the problem may be larger than one unexpected cost.
New borrowing can pay the immediate bill while adding another payment to the next month. If income still does not cover essential spending, the gap will return.
A free debt adviser can review the full position, check benefits, help prioritise bills and speak to creditors. Advice does not commit you to a formal debt solution.
MoneyHelper offers a free debt advice locator for confidential support across the UK.
Avoid illegal lenders
Never borrow from an unlicensed lender because the process seems quick or no credit check is required.
Loan sharks may charge extreme amounts, take bank cards or personal documents, threaten borrowers and ignore legal protections.
Check the lender on the Financial Services Register before borrowing. If someone offers a cash loan through social media, at work, in a pub or at your home, do not assume the arrangement is legal because the person is known locally.
Support is available if you have already borrowed from an illegal lender. You have not committed an offence by borrowing from a loan shark.
A sensible order to check your options
Before applying for a loan, work through these questions:
- Can the expense be delayed or avoided?
- Is it covered by savings, insurance, a warranty or a refund?
- Can the company accept a later or smaller payment?
- Are you missing any benefits, grants or local council support?
- Does your employer offer practical help?
- Could family support be agreed safely and clearly?
- Is lower cost regulated borrowing available and affordable?
- Does the repayment still fit after all essential costs are paid?
If the answer to the last question is no, borrowing is not the right solution.
How UKPayday fits into your choice
UKPayday is a credit broker, not a lender. We search a panel of participating lenders and brokers rather than the whole market.
Our service does not include every possible lender or every alternative form of support. Checking the options in this guide before using our service may help you avoid borrowing or find a lower cost solution.
If you continue and a potential match is found, the lender decides whether to approve the application and what terms to offer. UKPayday does not provide the money or set the interest rate.
You are not required to accept an offer. Read the APR, repayment schedule and total repayable, and make sure the payments fit your budget for the full term.
Borrowing should come after you have checked help that does not create debt and any option that may solve the problem at a lower cost.
Warning: Late repayment can cause you serious money problems. For help, go to MoneyHelper.
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