INTEREST rates may be at their lowest rate for more than 200 years, but small loan rates have more than doubled. Yet there are ways to get loans more cheaply.

BORROW MORE, PAY LESS

We have a fascinating phenomenon at the moment. The cheapest rate for borrowing under £5,000 is 11.9 per cent. Yet borrow £5,000 to £7,500, and it’s 8.8 per cent. This means currently it’s actually cheaper to borrow £5,000 than £4,500. I’m not talking about the interest rate here, but the actual amount you would have to repay. The massive difference means that if you’re near a boundary, which come at £2,000, £3,000, £5,000 and £7,500, it’s worth checking out whether you should borrow a little bit more.

SOCIAL SECURITY LOANS

It’s worth seeing if you can get loans from the Government’s social fund. There are two types, both for people without savings.

The first are for emergencies such as the roof falling in. You don’t need to be on benefits for these. The other type are budgeting loans, for those on benefits, which will pay for things such as school uniforms or furnishings. To get them, you need to go to the local social security office – but you may find that even though you qualify, they’ve run out of money.

USE THE CARD

Sometimes the cheapest way to get a loan is by using a credit card. The most obvious route is to pay for the goods with your card, then grab the longest zero per cent for purchases card that you can. Some cards also allow you to do a balance transfer from your bank account – in other words the card pays an amount of money in there – say £3,000 and you now owe the card that amount.

TV money guru Martin Lewis runs the consumer revenge website MoneySavingExpert.com
Ensure you get his weekly e-mail so you’re constantly saving money.