“Hi. I’m pretty tied up to being evicted soon if I fail to pay rent. I’m three months delayed and my budget just can’t keep up with my monthly bills. I need cash now, but I know that if I get another loan, I’ll just be extending my misery. But I don’t want to leave my apartment soon, so I’m getting a short-term loan. It sounds crazy but how else would I have it the other way?”
-Lhay, 28, Charlotte, NC
To start with, there’s always another way and we all need cash now. You didn’t tell us why staying put in your place is non-negotiable so we’ll assume that you need to stay whatever the cost. And that cost is getting a short-term loan.
Since you need cash now, short-term loans can be handy, indeed. Even in the UK and Canada, these loans are used to tide borrowers over to the next paycheck. You can get them fast and with little processing involved.
We hope you’re wrong about extending you misery of debt even if you need cash now. Our advice is instead of just focusing on getting a loan today, focus on finding a way to increase your income: a side-job or extra sales for example. FinancesOnline.com has tons of tips on how to make extra cash while you keep the day job.
Meantime, since you need cash now let us cushion the impact of short-term loans with these five tips:
1. How much do you really need cash now?
Know the right amount to borrow, no more no less. Any surplus cash means you’re paying extra interest or opening yourself to higher late payment penalties. Remember, too, that lenders will be goading you to borrow more. Don’t fall for this. They want to give more so they can charge more.
2. Don’t think that you need cash now; Think that you need to pay it now
Think of an exit strategy for your loan. It is easy to get these short-term loans, but will paying for them br easy too? We don’t think so. The reason you’re borrowing is that you’re short on cash; unless you get an additional income source you’re likely to be stretching your budget even thinner with a short-term loan. Likewise, borrowing to pay for your other loans is not an exit strategy. CNN points out why this practice may put your assets in danger.
3. Even if you need cash now, make time to get the best terms
Even if you need cash now spend time to read the best terms available to you. Bear in mind the following deals that favour you:
- no credit check;
- no teletrack reporting;
- reasonable interest rates;
- fair penalties (yes, anticipate that you may be late in paying this loan, too).
Online loan portals make it easier to sort lenders that match your financial situation. Often, you only have to enter your personal information, credit standing and work background, and these portals can deliver results that match your profile.
4. Be wary of risks
Scrupulous lenders know that you need cash now and they’ll use your misery to suck you dry. Don’t let them. There are fair lenders and the key is to find them. Watch out for hidden fees, hidden penalties and extra charges. These costs often appear after you’ve made the loan and they are subtly written in terms that you’ve missed. Also check the penalty section carefully. Anticipate that you may be late in paying this loan, and watch out for accruing penalties. These are devious tricks that can make a $1, 000 loan jump to $10, 000 in a few months of delayed payments.
Read the terms carefully, and as a rule of thumb, if the terms are hazy and it’s hard for you to digest their contents, move on to the next best lender candidate. Remember that even seemingly trivial charges can add up or slice a big chunk off your actual loan. Times.com spells out four of these dirty tricks being practiced in instalment loans, which can also apply in short-term loans.
5. Don’t panic even if you need cash now; stay positive
You will get a loan whatever your case is. Even the unemployed and people with really bad credit scores can secure one, so why can’t you. The key is to keep looking around and opt for the best terms. Panicking will cloud your better judgment and you may end up with a loan that compounds your finances rather than solves it.
We all need cash now and short-term loans can fill in that gap. But be honest why you need cash now. When it’s unavailable lessen the risk of short-term loans by following the tips above.
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