When you have urgent bills to pay or unexpected expenses crop up, and payday is still a few days away, a personal loan can be a great way to get access to fast money. However, you must always be careful when applying for or repaying a loan. Follow the tips listed below, which give some good advice about payday lending, to prepare yourself for making wise choices about managing your short-term finances.
Taking out a personal loan is a serious matter. If you don’t manage to make your repayments correctly, there can be serious consequences for your credit standing and problems with your regular bank. Always remember, any money you borrow isn’t ‘extra’ or ‘free’ cash; you need to repay it from future paychecks.
Even if your need is urgent, make the time to research lenders, interest rates and also other costs associated with the personal loans before lodging any applications. Remember that taking out a personal loan is usually faster than getting one from a bank anyway. You should still be able to get the money you require in time to meet your needs.
Don’t live on personal loans, using one to repay another. Don’t use them to constantly get you through from paycheck to paycheck. If your finances are getting that far out of hand, seek out a credit counselor or other expert in managing your financial problems. Mismanaged personal loans can end in bankruptcy.
Once your loan application is processed and approved, you will receive a call or an email confirming the details of the loan contract. It is essential that you read through all the terms and conditions provided before accepting the loan. There may be provisions that reflect your credit history. Be sure before you either accept or reject a loan offer; some lenders may impose a 30 day waiting period before you can reapply if you change your mind.
Don’t borrow more than you need. Some lenders may offer larger amounts than you have applied for, but remember that every penny you borrow now has to be paid back later, with interest. You don’t want to end up in a worse situation down the track by over-committing on what you have to repay.
There are a lot of unscrupulous lenders out there, and only a few good ethical ones. Do the research. Find out who has good testimonials and who has long lists of complaints.
Personal loans are really useful when you have money but can’t readily get access to it, i.e. it’s locked up in Certificates of Deposits or a similar investment. Weigh up the costs of withdrawing that money from its current location against the fees and interest charged on a personal loan; you will find that unless you default on a repayment and incur penalties, taking the loan will save you money in the long-run.
Always remember that personal loans are a short-term solution, not a permanent strategy. Know your reason for borrowing as well as your options when you’re faced with a financial emergency.