Working out a repayment plan for your borrowing
It’s crucial to work out the total cost of the credit you’re taking out, including interest payments, and not just the amount you’re borrowing or how much you can afford to pay every month. Taking the time to work out the full cost of any borrowing lets you plan your finances and ensure that you really can afford it.
What affects your borrowing costs
How much you’ll pay to borrow money depends on how much you need and how quickly you plan to repay it.
For example, if you want to borrow a small amount over a short period of time with a low interest rate, you might well pay very little interest (or none at all if you use a credit card charging 0% interest).
On the other hand, borrowing a large amount of money over a long time will …