As loan lenders take a stricter look at potential customers many of you will rather take out an overdraft than face potential rejection or higher interest rates.

Figures from the British Bankers Association showed in March overdraft debt jumped up by £217 million.

This comes after news of lenders tightening there belts on the criteria they expect you to fulfil before they agree to the loan. Many lenders are rejecting loan applications altogether whilst others will agree to a lower amount.

Also studies show borrowers are considering loans more carefully due to increases in food, fuel and reports on the credit crunch. Many of us are worried of taking on to much and due to the jump in interest rates many are concerned they will be unable to make repayments.

However an authorised overdraft may not be the answer as the best rate currently out there is 9.9% from Nationwide Building Society,  if you have a good credit record personal loan rates can be as good as 6.8% with Barclaycard or Masterloan.