Alternatives to expensive loans

Some types of loan are significantly more expensive than others. In particular, payday loans, loans that you get from doorstep lenders and illegal loan sharks tend to charge extremely high rates of interest. These forms of borrowing should be avoided if at all possible.

There are alternatives available, whether you need the money urgently or in the future, so find out what they are and make sure you stay MoneyFit.

Alternatives to expensive borrowing - now

If you really need some money now, and only need a small amount for a short while, consider alternative forms of credit which would be less costly than a payday loan or doorstep lender:

  • You may be able to get an authorised overdraft from your bank - see Overdrafts.
  • You might be able to increase the limit on your credit card. But make sure you talk to your credit card company before you spend and that you can afford the higher repayments - see Credit cards.
  • Sell something on online auction sites or advertise in your local HIVE.
  • Borrow from a credit union, if you are already a saver - see Credit union borrowing.
  • Borrow from friends and family – then do a budget to work out how to pay them back.
  • Talk to one of the many Service charities - many of them can help with grants or practical help - see Where to get help if you're in debt.
  • Check you're getting all the benefits you're entitled to – see Grants and state benefits.


Research carried out by Citizens Advice Bureau on behalf of The Royal British Legion showed that of those people seeking help with debts, those from the Armed Forces were four times as likely to have payday loans as people in Civvy Street.

Even if your income is low or you have a poor credit rating you may be able to borrow from a credit union or from friends and family, or get help from the government.

If you’re having a financial emergency then The Royal British Legion may be able to help you with an Immediate Needs Grant.  This is a small hardship grant to help you meet unexpected expenses, for example to replace a kitchen appliance. 

There are also a number of Service charities that can supply grants if you're in need - see Other Service Organisations on the Legion's Knowledgebase.

Alternatives to expensive borrowing - in the future

Stay MoneyFit and avoid borrowing money if you can; instead build up some savings for unexpected expenses - see Saving for emergencies.

Improve your finances by cutting back on your spending if you can, and start budgeting - see Budgeting to make the most of your money for some tips. And try our Budget planner to get you started.

Get help if you're struggling with debt

If you are struggling to repay existing debt or to stay on top of monthly bills getting free, confidential expert advice will get your finances back on track.

The Royal British Legion offers free advice for all serving, ex-Service personnel, their partners and dependants at fifteen Pop In Centres around the UK.

Other free-to-use debt advice charities can also negotiate with your creditors to give you time to repay your debts without having to resort to borrowing more - see Where to get help if you are in debt for more information.

Last reviewed: 06/11/2017