Loans and credit explained, in plain English
Borrowing can be useful, but it can also be expensive and confusing. This site explains how UK credit works so you can understand the options, the costs and your rights before you decide anything.
What this site covers
Every Loan is an information guide. We explain the main types of credit available in the UK, how the cost of borrowing is shown, how lenders look at your credit history and what protections the law gives you. We do not compare lenders, rank products or tell you what to borrow. Whether borrowing is right for you depends on your own income, spending and circumstances, and only you (ideally with free, impartial guidance) can judge that.
The pages are written from official sources: the Financial Conduct Authority (FCA), legislation.gov.uk, MoneyHelper, Citizens Advice and others. Each page lists the sources it relies on, so you can check anything yourself.
The main types of credit
Most borrowing in the UK falls into a handful of groups. Our guide to types of credit explains each one in more detail:
- Personal loans: a fixed amount borrowed and repaid in fixed instalments over an agreed term.
- Credit cards: a revolving limit you can use again as you repay, with interest if you do not clear the balance.
- Overdrafts: borrowing through your current account, arranged or unarranged.
- Car finance: hire purchase (HP) or personal contract purchase (PCP) agreements secured on the vehicle.
- Buy now, pay later: short-term, often interest-free, ways to split a purchase. See buy now, pay later and car finance.
- Guarantor loans: loans where someone else agrees to repay if you cannot.
- High-cost short-term credit: what used to be called payday loans, covered by an FCA price cap. See our page on high-cost short-term credit.
Understanding what a loan really costs
The headline monthly payment is not the whole story. The annual percentage rate (APR) lets you compare the yearly cost of different credit, and the total amount repayable shows what you will actually hand back over the whole term. Our APR and total cost guide explains how to read both, why a longer term lowers payments but usually raises the total interest, and what a "representative APR" really means.
Credit scores and credit checks
Lenders use information from credit reference agencies to decide whether to lend and on what terms. There is no single official credit score: each agency and lender uses its own method. A soft search does not affect your credit file in a way lenders can see, while a hard search leaves a footprint. Read more on credit scores and checks.
Your rights as a borrower
The Consumer Credit Act 1974 and FCA rules give you important protections, including a right to withdraw from many credit agreements within 14 days. Our page on your rights when borrowing sets out what is covered and where to complain, including the Financial Ombudsman Service.
Check who you are dealing with
Most lenders and credit brokers must be authorised by the FCA. Before sharing personal details, check the firm on the official register. We show how on checking a lender is FCA authorised. If someone lends without authorisation, they may be a loan shark, and our loan sharks page explains the warning signs and who to contact, in confidence.
If you are struggling with repayments
If you are behind or worried about being able to pay, you are not alone and help is free. MoneyHelper, StepChange and Citizens Advice offer free, impartial debt advice. You should never need to pay a company to arrange debt help. Details are on our free debt help page. Acting early usually gives you more options.
How to use this site
Start with the page that matches your question. If you are comparing costs, go to APR and total cost. If you feel pressured, go to loan sharks or debt help. For quick answers, see our frequently asked questions. Prices, rates and rules change, so always check the official source linked on each page for the latest position.
This is general information, not financial advice. We're not a lender or broker and don't arrange credit.
Frequently asked questions
Is Every Loan a lender or broker?
No. Every Loan is an information site only. We do not lend, broker or arrange credit and we do not recommend lenders.
Where can I get free help with debt?
MoneyHelper, StepChange and Citizens Advice all give free, impartial debt advice in the UK. You should not need to pay for it.
How do I check whether a lender is legitimate?
Search the firm on the FCA Firm Checker (the Financial Services Register) and check the contact details match. If unsure, call the FCA on 0800 111 6768.