If you are looking to give your home a bit of a makeover, but do not quite have the money just yet, you essentially have two options. You can be patient and put money into a high interest savings account until you have accumulated enough to make the changes that you want, or you can take out a loan of some sort. In most cases, the saving option is going to work out a fair bit cheaper, but if you have just moved into a property, then this isn’t really an option. Also, if you are investing in more energy-efficient appliances, then the cost benefits of reduced energy usage may well cancel out the added cost of taking out a loan.

There are basically three different ways to borrow money from a private lender – secured loans, unsecured loans, and credit cards. A secured loan is one in which the borrower puts up an asset such as their home as collateral on the loan. If they fail to keep up with repayments, the lender could repossess that asset in order to recover their losses. This makes them a lot less risky from the lender’s point of view, but a lot more risky for the borrower. Because the risk to lender is low, they are in a position to offer larger loan amounts and lower interest rates with a secured loan than with any other type of credit, which makes them the best-value option for homeowners looking to borrow money.

Unsecured loans, also known as personal loans, do not require the borrower to put up any assets as collateral. This makes them more risky from the lender’s point of view than a secured loan. This means that the loan amounts offered tend to be smaller, and the interest rates are higher. Also, if you have a patchy credit record, you may not be able to obtain the best rates, if you are offered a loan at all.

Credit cards are usually the best option for making small purchases. Many of them offer interest-free introductory periods, and most of them will offer some additional purchase protection. However, they are of little use if you need to pay for something in cash, and you can end up paying them off indefinitely if you are not disciplined about paying them off. For more information about loans, visit the Santander website.