Short-term loans are available for most people when they need them. However, you may see them advertised or know of them and wonder when is the best time to take one out. It is wise to think of a number of factors before deciding whether you should be taking one out.
Need money in an emergency
Short-term loans are designed, like most loans, for those that need money in an emergency. If you are not desperate for the money then it is not worth borrowing because of the cost. Borrowing costs a lot of money, however you choose to do it, and you need to make sure that it is really worth it. You will need to decide whether your circumstance is an emergency. Think about whether you can wait a bit longer or whether you will be in serious trouble if you do not have the money right away.
No other options
It is worth thinking about whether you have any other options. If you need money quickly, then it is unlikely that you will be able to arrange any other type of loan. It is worth though looking at all of the options that you have available to you. There could be some better options that are cheaper. Make sure that you have not discounted options because you think they will not be available, make sure that you check to be sure first. If you owe money for a bill, for example, you may be able to phone the company and delay paying. If you need a new washing machine you may be able to use a laundrette until you can afford one. If you need money for food, then you may have no other options than a site like Emu.co.uk.
Need money quickly
If you need the money quickly then a short-term loan could be the best option. Most loans take time to arrange and you could wait weeks at least, until you get the money that you need. If you are in an emergency and need money now, then a short-term loan may be able to get you the money within a day or a couple of days. This is partly due to the fact that they do not do a credit check and therefore save time. Unless you already have credit available to you – such as by having an overdraft or credit card, then this is likely to be the fastest option for you.
Can afford the repayments
It is really important to think about the repayment of the loan. Find out how much you will have to repay as you will need to think about the amount that you borrowed by the interest and fees. Think about when the repayment is due and how much it will be as well as whether there will just be one lump sum repayment or whether there will be several. You need to consider whether you can afford these repayments. Would you normally have this much money available to you or do you think that it would be better to think of ways to earn more or spend less before you need to make the repayment. It may be that you can go without a few things and pay it off, but you may find that you need to consider getting more money. It may be that you can sell a few things, do some extra work or something like this to get some extra.
Can cope with the repayments
Even if you can afford the repayments, you need to think about how you will manage for the rest of the month once you have made them. It is sometimes the case that people will pay off the loan and then have trouble managing until the next pay day and have to borrow money again to keep them going. It is best to avoid this if you can and so you need to think about how you will manage. You might be able to reduce what you spend on other things or perhaps think of a way to earn some more money, perhaps by selling things that you won or picking up some extra work.
Have compared loans
Make sure that you have compared the prices of the different short-term loan before you take one out. It is worth making sure that the loan you take out is not unnecessarily expensive. You need to check the amount of money that you will have to pay in interest and fees and see how that compares to other loans. It is also worth comparing the late repayment fees as well, just in case you do repay late and need to pay them.