As we wade through these difficult economic times it is often hard to know where to turn when he fall on tough ground. The banks have made it harder to borrow money since the financial chaos that has recently enveloped our world. They are imposing ever harder and tougher to pass checks on our credit history and even though there are ways that we can improve our credit score, unless we are in a financially sound situation, it can be tough to get out of the rut we are in.
We may have to turn to short term borrowing, and although this is not always a good idea and can come with its problems, we may have no choice. The CEO of, Kevin, said recently in an interview: “Although short term borrowing can be risky, we sometimes have no choice but to turn to it, it is however important that we shop around and that we get the best deal possible in order not to take such a hard financial hit that we won’t be able to recover”. So how do we go about finding the best deal when it comes to short term borrowing?
There are certain things you are going to want to look out for when it comes to short term lenders. You are going to want to make sure that they are legit, although you don’t hear about it as frequently in the news anymore, loan sharks do still exist. You are therefore going to want to look online for your short term lender. Make sure they have a legit website and make sure that you can find them through online comparison sites. Also if you manage to attain short term lending online, you often get a very swift approval often in minutes, this is great if for example you have to pay a bill by the subsequent day.
Online comparison sites also give you a greater idea of what sort of deals you are going to be able to get as the competition will drive prices down as different loan companies try their best to get more loan companies through the door. Once you have found a good deal you can then start to haggle for an even better deal. If you can call up aprovider and say I can get it for a better rate at a certain competitor you might be able to haggle an even better deal, just like with telephone contracts or car insurance.
If as we mentioned at the start of the post you are seeking a short term loan because you have no other option (i.e. your bank won’t lend you any money) you might want to try and apply at a short term loan company that doesn’t do background credit checks as otherwise you might not get the loan and by doing the check you might damage your credit rating further. Another option is to have a co-signer such as a friend or a relative to back up your loan application as a guarantor. However this can add time to the application and credit checks might be done on your co-signer.
The reason that you have to be careful of such loans in general is because of their rate of interest. Most of these companies have APR (percentage which you have to pay back) in the thousands meaning that if they drag out they can become extremely costly and essentially bankrupt you. This is why they are called payday loans, because you should intend to always pay them back on your next payday and this is why they should only be used when you have absolutely no other option.
An article recently featured on the BBC recently talked about how these should be regulated and by whom. Although many where against the capping of the interest rate, the legislation got through and the only losers seemed to be loan sharks and payday loan companies alike. However seemed to suggest that if used correctly payday loans do provide a legitimate service that can help its customers to get out of a tricky unforeseen situations such as larger than usual bills, vital car or house repair costs or even to subsidise an unexpected spend of pretty much any kind such as the purchase of white goods.
It is worth noting that payday loans have resulted in horrific stories of individuals having to declare themselves bankrupt and having to start their financial lives from scratch due to excessive dependence on payday loans to pay bills. This vicious cycle that snares you is caused by never paying off the debt fully and using another payday loan company in order to clear a debt with a different company. In this scenario, you will never be able to clear your balance and using a different loans company to pay your debt is just a method of burying your head in the sand without actually sorting out the real problem
This post was written by the author ofthe website that focuses on how what companies and governments do affect our wallet on a daily basis.