Despite the fact that the UK economy has recently been showing signs of a recovery, figures show that Brits are still struggling to balance the books.

With income levels being squeezed, and the cost of living continuing to rise, it’s no wonder that consumers have had to dip into their savings to fund anything from a holiday (28%) to day-to-day living expenses (18%).

As well as drawing on their savings pots and making cutbacks, consumers have also turned to borrowing in an effort to get their finances in order.

While many turn to loans, credit cards, and overdrafts to offer them a temporary financial buffer, the situation can be more complex for those with a bad credit history.

A quarter of Brits responding to a recent survey were concerned that their financial history would prevent them from fulfilling their dreams. However, the good news it is that there are alternatives to traditional lending that consumers can draw on when needed. Here are just a few.

Credit Unions

Credit Unions are non-profit organisations which are generally established to benefit local communities. There are around 500 currently established in the UK, and if you have had difficulty securing traditional high street lending then Credit Unions may be an option to consider.

Credit Union loans can start from as little as £100 and interest is capped at 2% a month or 26.8% a year APR. Credit Union loans do not feature any hidden charges and if you want to repay your loan early then you will not incur a penalty.

Your local authority or housing association should be able to provide you with further details of your nearest Credit Union.

Logbook loans

Another option for those who aren’t able to secure a loan by traditional means is logbook loans, such as same day car logbook loans from Loan My Motor. These loans give you the chance to borrow between £1,000 and £50,000 with the loan secured against your vehicle. The amount you can borrow will be determined by the value of your vehicle, and you can choose to make fixed repayments over a period of 12-36 months. While loan fees may be higher than those offered by a bank, you will generally get an agreement on a logbook loan in a matter of hours.

Once you have fully understood the loan’s terms and conditions, and ascertained that you are able to meet the repayments, this loan could be an option for drivers looking for a loan agreement with a fast turnaround.

Budgeting loans

Government Budgeting Loans are available to those claiming the following benefits:  Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance and Pension Credit.

Budget loans are generally interest-free and are paid within a period of 104 weeks. Borrowers can secure loans from as little as £100 pounds to pay for a range of essential items including furniture, home improvements, maternity expenses, travelling expenses and much more. Claims for Budgeting Loans can be made through your local JobcentrePlus.

Peer to Peer lending

Peer to peer lending matches borrowers with savers, with the latter lending to individuals and small businesses. As the middle man, i.e. banks, building societies, is removed interest rates on a five-year loan can be as little as 5% for borrowers, while savers could benefit from interest rates of up to 16%. It’s important to check that peer to peer lending sites are registered with Financial Services Compensation Scheme, as this protects savings up to the value of £85,000.