Deciding When to Take Out a High Interest Loan
The opportunity to procure fast cash for any reason is expanding daily as new lenders are establishing themselves online. Those interested can fill out a simple application, meet a few minimum requirements, and get approved within minutes. The quick and easy process leaves little time to consider the impact the loan with have on regular finances. A payday loan, for example, typically has to be paid within thirty days or less. It also comes with a very high interest rate, and must be paid all at once.
The process meets an immediate need for money, but can lead to bigger issues. Failure to pay it back in time can result in exorbitant late fees, higher compounded interest, and a vicious cycle to stay one step ahead of the deadline. In extreme cases, individuals have resorted to taking out payday loans from different companies go pay off the original loan. While there are situations that do warrant taking out this type of loan, it should be used as a last resort.
Knowing the different between a need and a want will help individuals make wise decisions regarding finances. The vehicle that is used to get back and forth to work breaks down, for example, and money is needed fast for necessary repairs. The need is transportation to retain a job. In contrast, taking out a high interest loan to finance a long weekend getaway is catering to a want. The weekend could end up costing double what it would if you have just saved up for it, or relaxed at home.
A short term loan has a slightly lower interest rate, and can be paid back in installments. It will still end up costing dearly, but is a bit more manageable. Some lenders allow customers to take up to six months to pay back the balance and the interest. There are stiff penalties and fees for late payments, so think carefully before applying for this type of loan. Select a company that is Short term lender authorised. A valid license by the Financial Conduct Authority, and regulation by the Consumer Credit Act of 1974 ensures that practices will be fair and legal. Be sure to understand all the fees, interest rates that apply, and the terms for repayment before agreeing to take out the loan. Hidden fees, added costs, and unclear payment dates can lead to financial ruin. Those in need of short term loans can go to Moneyboat for details, transparent charges, and to fill out an application.