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How Long do Short Term Loans Actually Last?

When you see the phrase ‘short-term loan’ you may wonder how short the term actually Is and how long the loan lasts for. Some people do not like the idea of being in debt and so having a loan that does not last long can be extremely appealing. This means that short-term loans could suit them really well, but how short is short-term?

How long is a short-term loan?

So a short-term loan will vary in length. The very shortest could last for just a few days and some may last for months. Short-term loans tend to be payday loans. These will allow you to borrow a sum of money until you next get paid. This means that they will not last longer than four weeks normally but could be very short, depending on how close to pay day you decide to take them out. There are some types of short-term loan that might take longer to repay though. It will very much depend on what type of short-term loan you take out.

Types of short-term loan?

A payday loans is probably the shortest term loan in this category. You will find that an instalment loan is similar but instead of repaying in a lump sum, you will repay in instalments over a series of months. Although the loan will still not last that long, it will be longer. You will find the repayments easier to manage or will be able to borrow more money if you use this type of loan as you will not have to repay so much money in one go. This can mean that this type of loan will be more preferable for some people.

You may also see guarantor loans being included in this category. These are repaid In instalments but you borrow much larger amounts and so they could take years to repay and so are not really that short-term at all.

Is short going to work for me?

It is worth thinking hard about whether a really short-term loan will be the right choice for you. It is great to think that your loan will be repaid really quickly and this is a great benefit. However, if you have to repay a lot of money in one go then you could find that it will be quite tricky to do this. You will need to make sure that you prepare carefully for it. You need to find exactly how much you will need to repay and then you will be able to work out whether you will be able to afford this amount. It will very much depend on how much you borrow and how much you get paid as to whether you can afford it, so it is a very personal thing. You will need to check how much the interest and fees will be as well, because you will need to repay those as well as the amount that you have borrowed.

As well as knowing exactly how much you will need to repay for this loan and working out if you will be able to afford to repay it, you also need to think about the other costs that you will also have to repay. You will have other bills, direct debits and standing orders to pay for as well as food and you will need to make sure that you have enough money to pay for all that as well.

This is the disadvantage of having a really short-term loan. So, although it is great that it will be repaid really quickly, it can be really hard to actually manage when you do so. It can therefore be worth considering whether it might be better to have something that you can repay over a longer period. Even repaying for just a few months could help and this means that it could be that an instalment loan will be better. It is likely that thus will be more expensive as you will owe the money for longer but it could be well worth it if it means that it will be a lot easier for you to repay.

Of course, you could also do other things to make the repayment easier to manage. For example, you could take on more work so that your pay is higher. You could compare loans and make sure that you have the cheapest possible one. You could see if you can reduce the cost of anything else you buy or buy less of it. You could even consider selling some things you own to raise some money to help to pay for the loan. There are lots of possibilities and it is a matter of finding something that you know will work well for you. So make sure that you are familiar with your household finances, work out what free time you have and then pick the right loan and do what you can to make sure you can confidently repay it.

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Will Payday Loans be Easy to Repay?

If you are thinking of taking out a payday loan you may be concerned about how easy it will be to repay them. This is something that should be a concern to every borrower as we need to be sure that we will not be charged extra because we are unable to repay the loan. There are things that you can do though which will make loans easier to repay. It is a good idea to think about these and to make sure that you are confident that you can repay a loan before you take one on.

How payday loans repayments work

Payday loans are quite different to many other types of loans in the way that they are repaid. Most loans are repaid in instalments but a payday loan is repaid in one lump sum. This means that all of the money borrowed plus the interest and charges are all repaid in one go. This can be a great thing as it means that the loan is repaid really quickly and for some people, this can be a great relief as they do not like being in debt. The loan is also repaid on the day that you are paid which means that there is a greater chance that you will have the money available to repay it.

The loans are set up so that you will repay them in full on your next payday. This is done by a direct debit so that there is no chance that you will forget to repay. This means that you will not need to worry about this, but you will need to make sure that you have enough money available in your account to pay it. Even though you have just been paid, there may not be enough.

How to ensure you can repay

It is important to check all your finances to ensure that the payment can be made. Firstly, you need to be completely sure that your pay will get in that day. Some people get paid on a certain date, others the last Friday in the month or things like this. Make sure that you are completely sure when yours is due. Also find out what time of the day you are paid as you need to make sure that they pay is in the account before the repayment goes out. If you have any doubt then it could be best to set the direct debit to have the payment to go out the day after you are paid.

You will also need to find out what other payments automatically go out of your account around that time. You might have utilities, contracts, loan repayments, rent or other direct debits or standing orders all going out around that time of the month. This means that you need to find out how much they all add up to so that you can be sure that there will still be enough money coming out to pay for the loan. You will also need to think about whether, once the loan is paid, you will have enough money left to pay for everything else you need to buy before you next get paid.

If you are concerned or find that you will definitely struggle then you still have a few options. Firstly, see whether there is a cheaper loan that you could take out. Also see whether you can find ways that will make repaying easier. You could perhaps see whether you can cut down your spending in other areas. You could also see whether you will be able to earn more money too. These might seem difficult but there could be things you could try. Things like comparing prices on everything you buy and asking yourself if all purchases are necessary, for example. Then you could consider whether you can earn a bit more, even getting a little form doing online work or a bit of overtime could make a difference.

Having a backup plan

It can also be really wise to have a backup plan. Hopefully you will only take out a loan if you are completely convinced that you will be able to repay it. However, you might also be wise to have a think about what might happen if an unexpected bill comes in and it stops you either being able to repay the loan or being able to manage to pay for everything else you need. This means that you should have a plan as to what you will do if this happens to you.

It is worth thinking of what you might eb able to do to help. You may have things you can sell; you might be able to do some freelance work or extra online jobs. You might be able to cut back spending even more. There could be all sorts of things you might be able to do. It is wise to come up with a very specific plan so that you can be confident that you will be able to use it should you need to.