Short-term loans have received a lot of bad press over recent years. This was mainly as a result of exorbitant interest rates, administrative fees and other costs. Yet for many, a short-term loan is a viable option to get out of financial trouble. Here are six reasons why you might need to access a short-term loan.
The bargain of a lifetime
Holidays are always important. If you’ve spotted a travel agent’s deal that’s too good to miss, then as long as you’ve done all of the sums and know that you can afford the repayments, a short-term loan will prove to be a welcome solution to any cash strapped shopper. Why not click here to see if you can afford a logbook loan. Unlike payday loans, you can repay the amount borrowed in small regular amounts until the debt is repaid.
No one wants to be locked into a debt
If you’ve borrowed money, you don’t want to be locked into a repayment schedule that will prove costly and possibly inconvenient. You may even forget why you took out the loan in the first place. According to the website Money Saving Expert if you shop around you can still access a cheap short term loan, this might be through 0% introductory credit card offers or even a 0% overdraft rate with a new bank account. As long as you can prove that you have a good credit rating, this type of offer is the ideal way to source a short-term loan.
The future is always a mystery
If you’ve worked out your budget for the foreseeable future and you are confident that you can meet your loan repayments, then a short-term loan is perfect for most purposes. No one has a crystal ball. Illness or accidents, or even recessions can occur at any time, so borrowing for a short period of time may be safer than a long-term debt.
Manage your debts
A recent article in The Guardian highlighted the dangers of debt. Non-mortgage borrowing has reached a staggering £10,000 per household across the UK, or £239 billion in total and this figure is set to grow. This figure does include unavoidable student loans, which amounted for £9.1 billion of the £19.7 billion increase in 2014, and personal debt including loans and overdrafts amounted to £6.4 billion. If you want to manage your finances, a short-term loan that’s repaid within a fixed term may be your best option.
You need money quickly
If you need funds in an emergency and don’t have time to wait for a bank’s decision on an overdraft, or your credit card is maxed out, then a short-term loan is perfect. You’ll be able to respond to the emergency and repay the money in over a short period of time.
Always read the terms and conditions
Loans vary from company to company. Despite new regulations governing this financial sector you’ll still find that some loans are more expensive than others. As long as you understand the repayment schedule and all of the connected charges, then this type of loan can bail you out of a difficult financial situation.