If you have to borrow money there's no reason to pay over the odds.

There are plenty of companies willing to offer credit but taking the first deal offered can cost you hundreds of pounds.

Buying a computer using the credit offered by high street retailer Time, for instance, would cost you 29.8%.

That is as much as four times more expensive than arranging to borrow the money before you go into the shop.

If you are looking for cheap loans authorised overdrafts can be one of the best ways of borrowing money.

Overdrafts are loans that are attached to current accounts. They allow customers to use more money than they have in their current account - up to a pre-set limit.

The best rates are offered by The Clydesdale Bank and Yorkshire Bank which charge 6.7%p.a. Cahoot the Internet bank operated by Abbey National charges 8% on its overdrafts.

Better still, if you want to borrow a smaller amount, Cahoot charges no fee or interest on authorised overdrafts of less than £250.

But be careful, if you borrow more money than you have agreed with your bank then the penalty rates and fees on overdrafts can be very high.

If you want to borrow larger amounts of money then you will probably have to take a personal loan.

The best personal loan rate is offered by Cahoot, which charges 8% for loans under the value of £5,000.

Northern Rock and American Express also offer competitive rates on loans under £5,000, charging 8.5% and 8.9% respectively.

Loan rates vary depending on the amount you want to borrow. If you are looking for a bigger loan you should compare rates amongst a number of providers.

Source:-news.bbc.co.uk