If you borrow money you have to pay for the service. The amount you have to pay is known as the interest rate.

It is worth shopping around before you decide where to borrow. You also need to check out the conditions of the loan. For example, whether you will have to pay a penalty if you decide to repay the loan early, or whether you will face late payment charges if your circumstances change and you have difficulty paying.

A bank may offer interest free periods on your credit cards, and some companies offer the same when you buy goods. However, you need to make sure that you can pay off the money you borrow before the end of this time or all of the interest may be added anyway.