Short term fix not always long term gain
For those in permanent employment and therefore with a steady income, the temptation of a few luxuries that present themselves on a regular basis, sometimes get the better of us and we dip into savings, or maybe turn to our plastic companion to make a purchase on credit. The advertisers of this world have a lot to answer for, with their promotions that lure us in offering bargains and “one off” opportunities. Additionally, little treats such as short breaks, nights out, or concert and sporting tickets, often have to be funded outside of the usual budget.
There is a growing trend towards another choice to fund these, and that is in the form of the pay day loan. For many this is a godsend and in most cases, it is a great one off option, which provided it is cleared within the accepted time-span, offers an easy route to making the purchase you desire. However, it is when people turn to this method, when they do not realistically have a chance of making the repayments, that the problems can begin.
Christmas for some is the time when it seems acceptable to go into a little debt to provide the children with their wishes, but this can so easily spiral out of control, because come the new year, the repayments can grow to unmanageable proportions. These type of loans can be extremely expensive with huge rates of interest attached to them.
Initially, they may appear more appealing and certainly more convenient than an account overdraft, or an arranged loan and there is nothing wrong with that theory if paid back within a few days. However, once the planned date for clearance is exceeded and an extension is activated, then late penalty fees can be introduced, which can be particularly harsh, and coupled with the high interest, very soon the loan has rapidly increased out of control.
There may be the solution put forward to extend, defer or roll-over, but all these are likely to lead to additional financial difficulties. The pay day loan consolidation can work, but only if exercised in the manner that they are created, which is prompt repayment. Short-term borrowing sometimes is a necessity, but not at the expense of essentials, such as mortgage and utility bills.
Some people even take out these loans to repay existing debt, but this practice really should be avoided, as it will inevitably cause even more debt that simply cannot be managed. The ease of the pay day loans is that no credit checks are required, so opening them up to a massive audience, who otherwise would not be granted credit. This speeds up the application process and also means that, provided that it is paid back within the preset parameters, it will never appear on any history check.
There are some who choose this route as an alternative to asking family and friends to help out. This could be for several reasons, but often the main one is that they do not want it to be known that they have run into financial troubles, so try and find a quick fix; but unfortunately, in some cases this can back fire. Being in debt to close relations can be both embarrassing and put a strain on friendships, but at least there would be no spiraling interest costs. Click here to read more information.
Often, when carrying out a little comparison between all options, the short term loan might seem the best way forward, but if so, then it is vital that nothing prevents immediate repayment. Basically, it is a risk assessment process, with all extremes taken into consideration. Advise is out there and should be sought before plunging into something that might escalate a problem rather than solve it. The short-term loans are regulated and can help, but only in the right circumstances.