Lenders and card issuers

A lender provides money you borrow and repay over time, such as a personal loan or mortgage. A card issuer provides a credit card, which is a revolving form of borrowing: you spend up to a limit, then repay. Many banks do both, and some retailers and supermarkets issue cards without offering loans.

Yes. All lenders must check your creditworthiness and satisfy themselves that you can afford the repayments before lending you money. Payday lenders must also check your creditworthiness before giving you a loan, rolling one over or increasing your credit. This applies whether or not you are an existing customer.

Deposits held with banks, building societies and credit unions that are covered by the Financial Services Compensation Scheme are protected up to the scheme's limit. Borrowing works differently: if a lender fails, the debt can be sold or transferred, and you still owe it. Protection applies to savings, not to loans.

Yes. A bank, building society or finance company can give you a personal loan whether or not you are a customer. You can apply in person at a branch or by post, phone or online. The lender will still run affordability and creditworthiness checks before deciding.

You can get a credit card from banks, finance companies and larger supermarket and store chains. You can apply online, by post, by phone, or at a bank or building society. The interest rate should be clearly displayed on any application form and promotional material, and rates vary between providers.

A credit union is a not for profit community lender providing affordable loans and savings, and in some cases bank accounts and other services, to its members. Because members share a common bond, credit unions can serve people who struggle to access mainstream banking. They are regulated in the same way as other lenders.

Store card interest can be higher than on bank loans or credit cards, so it is worth checking which is cheaper overall. Research has found some awareness that store card balances were subject to a higher interest rate than credit card balances. Charge cards work differently: interest is not charged on the amount borrowed.