If you are considering getting a short term loan, it is worth making sure that it is the right time for you to do so. All loans can be risky and it is important, especially with expensive short term loans, that you are taking the risk at the right time.
Short term loans are designed for people to use in an emergency. They have to be paid back very quickly and usually only lend small amounts of money. They would normally be used to pay a bill or cover some expenses which have to be paid urgently. Therefore they should only be taken if the money is needed very quickly and paying for something essential.
In an emergency it can be tempting to make a quick decision. It is easy to be in a panic and quickly borrow money without really making sure that it is the best thing for you to do at the time. However, it is worth trying to step back and think things through. This can be really hard as we can act irrationally when we are very stressed. It can be wise to discuss it with a friend, family member or debt counsellor to make sure that you are doing the best thing.
Most short term loans can be organised very quickly. They may even be able to get you money within a few hours and so if you need money fast they can be the best option. However, if you have an overdraft facility or a credit card, then these could also be options for you which will be even quicker to organise and could be cheaper, if they are paid back quickly.
A short term loan is very expensive and if you do not pay it back when required it is even more expensive. This means that you need to make sure that you will definitely be able to pay it back when needed. You will be given a repayment date and you should make sure that you will have enough money to repay it when you need to or else you could find that you will end up with a huge amount of debt.
Short term loans do not always do credit checks. This means that anyone with a poor credit rating may find that they are the only option available to them if they want to borrow some money. However, they should not be tempted to borrow if they do not desperately need the money. A loan like this is expensive and you will have to repay it quickly including the interest and charges and this can be difficult for some people to manage. As said before, the fees for not repaying on time are very high and so if there is any doubt that it will not be paid back, then it should not be taken out.
So because a short term loan is so expensive, it should only be used in an emergency and after all other options have been considered. Even if you have a bad credit record it is worth seeing if you can get a cheaper loan elsewhere first, you never know what you might be offered. If you need money quickly it again, could seem like a good option, but do check if there are cheaper alternatives. Most importantly make sure that you really do need the loan. If you owe money to someone, then call them and see whether you can delay paying it. Make sure that you really need the money and that you cannot possibly manage without it. Even if you must have it, see whether you can raise some extra money, perhaps doing some freelance work, overtime or getting and advance on your pay. You may be able to sell things you own or ask friends and family to help out so that you do not need to get into expensive debt. Only after you have eliminated every other option and you know for sure that you must have the money, should you go ahead with this sort of loan. Even then you must be confident that you will be able to repay it when required or else you could end up in further debt and in a much worse mess than you started in.