KNOWING WHETHER SHORT TERM LOANS ARE AFFORDABLE
Warning: Late repayment can cause you serious money problems
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Representative Example: Representative 1286.98% APR on a loan of £300.00 with 5 monthly repayments of £101.03 Total amount repayable £505.13 Annual interest rate (fixed) 290%
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I can never stress the importance of knowing whether any finance being applied for can be affordable to get repaid back. A loan of any kind should never even be applied for if it is not affordable for someone to manage. Missing loan repayments also will nearly always result in severe negative consequences for that person and most people will always want to avoid this from ever happening. Before finance is applied for it will always be wise to make sure all the avenues are explored before an application is made. When it comes to borrowing money people have to strongly consider a number of different things before they should ever just rush into applying for the first kind of finance that comes along their way. There are many different types of loans, not just borrowing amounts but also over different terms people can repay the debts. Credit cards are also a common way to borrow money from the financial market place, they allow people the chance to pay for items or withdraw cash on credit. No matter what kind of finance it is it has to be affordable so the debt when obtained can be repaid back.
If anyone then is needing to know whether they can afford the finance finding out what their average monthly disposable income amount is can help decide whether it is affordable for them to manage. This amount may actually vary from month to month however it still should provide a good indication as to whether any loan repayments are affordable. To find out that amount someone can in detail write down all their income expected for the month including items such things as wages, any possible benefits and credits due etc. Then from that amount deduct all the monthly expenditure due over the same period of time. That will include items such as rent payments, debt payments a person has and other things such as food or transport costs. The amount after the calculation is the disposable/spare income. If that amount is high then most likely the short term loan or other finance can be affordable to be managed however if low then the loan may not be manageable.
Sticking with short term loan finance, when these kind of loans are taken out people should know that as the name would suggest repayments are over short periods of times and it can be because of this that high interest is normally charged when short term loans are taken out. A payday loan for example is a type of short term loan. They are repaid back over short durations of anything up to twelve month maximum period. People must then know that when large repayments are due then they have to have the required funds to meet these repayments otherwise the repayment will be missed. The shorter the repayment term typically means the larger the repayments due however that way less will be paid back in total rather someone repaying short term loan debt over a longer period of time.
A PAYDAY LOAN IS A TYPE OF SHORT TERM LOAN
People may not actually realise but when it comes to borrowing money there are a number of different options available for people to take out from the financial market place. It is always very important therefore that before any financial application is submitted someone they explore their different borrowing options that may or may not be available to them. When it comes to a loan for instance people can nowadays so often take out both short term single payment loans or maybe instalment loans as the borrowing common alternative. These loans can offer people a variation of loan amounts but also different repayment terms when it comes to settling the loan. Both are very common ways to borrow money as are the use of credit cards. They allow people the chance to pay for items or withdraw cash on credit up to a set limit via the use of the card itself. That is also a very common way to borrow money. In this article below I am going to firmly focus on short term loan borrowing in more detail and explain what kind of short term loans can be taken out and why they could be useful.
There can always be times when people need money. A short term loan will most likely not be of use if people are looking to borrow large amounts as short term loans can normally be offered for amounts up to £500.00 for new borrowers. They can though be useful for people who need short term finance for a limited period of time. A short term loan when obtained must be repaid within a relatively short period of time and normally because of that large repayments can be due on the product when it comes to clear the debt. They allow people the chance to take out loans quickly, people can apply for them online within just a few minutes and then if the application was to be successful people can receive the funds the very same day of making that application. If someone ever needs a small amount of cash quickly to tide their finances over until their next payday then short term loans can definitely help.
One of the most common short term loans available in the market place would be the single instalment payday loan and more and more people can end up turning to this finance when they need money for a short term financial need. A payday loan should only be used for a quick fix and never should be used as a long term financial requirement. They when they are obtained must be repaid in full with high interest the next time that person is paid by their employer hence the name payday loan. This short term loan can normally be taken over a maximum duration of thirty days but most of them are repaid even earlier than that period. The interest can vary on the product depending on the lender chosen however many lenders will charge around £24.00 per £100.00 borrowed by a customer per 30 day period and considering how little time people have the finance for that is expensive interest. There are definitely cheaper ways of borrowing money than payday loans.