Credit Crunch

Even if you don’t know anything about economics or finance, there’s one thing that we can be sure about: life is expensive. Not only that, but when you’re faced with big bills, it can be pretty stressful too. Many people take out loans to help to ease the financial pressure of large purchases.

During your twenties you may take out a student loan to get you through university. When you graduate and start work, you’ll probably need a car to get you out and about and a loan may seem like a good idea to give you that helping hand.

You’ll want your own house to live in, of course. Then, perhaps, you plan to get married, that’s always an expensive affair. After that the kids come along and that brings a whole lot of other expense which feels like it’ll never go away.

Often, a loan feels like the only option to help you manage your money, so it’s important to know about the different types of loan available – and what to do if you find you can’t meet the payments.

When you borrow money, it’s important to consider the rate of interest you’ll be paying. Some loan providers, such as credit unions, may provide a relatively low rate of interest, but others can be as high as 20 or 30 per cent – which means that you’ll be paying back a lot more than you borrowed.

Many people are enticed by offers of 0% interest – but it is important to read the small print very carefully: how long will this interest rate last, and what rate will it jump to when the 0% period is over? The more you understand about your loan before you take it out, the more prepared you will be to meet the payments - and you may avoid getting a nasty shock when you open your bill.

Neil and Diane's Cash Clinic

On Monday, Neil and Diane’s cash clinic will be looking at the real cost of borrowing and getting some advice on different types of loan.

We’d like to hear from you if you’ve got your own experiences of borrowing money.

• Students: How much money have you borrowed to help you complete your studies?
• Newly weds: What does the average wedding cost these days? How did you fund yours?
• Drivers: Did you get a good deal on your car loan? How much did the old banger end up costing you?

Send us your stories by filling in the form below, or tune in to Neil and Diane on Monday morning between 10am and 1pm for the BBC Tees Cash Clinic.