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Are Short Term Loans Really Worth It?

15 January 2013 One Comment

Are Short Term Loans Really Worth It?


If you have ever been in a situation where you need some additional money to help pull you through you would have looked at what your available options are. Some people will go to their parents, or other family members in order to get a loan with hopes of no or low interest being added when it comes time to pay them back. Perhaps you also have considered selling something you have, along with other options.  Not everyone is ever in need of a short term loan. Some have either been fortunate enough to obtain enough money through work, other means or just saving their money. This provides a much appreciated cushion if unexpectedly money is needed. However not everyone that is in need of a short term loan is automatically a poor saver or financially irresponsible. Situations arise in life that require additional finances in order to get someone out of a squeeze. But lets look a little deeper at short term loans and if they are right for your situation.

Lets get something clear and stress its importance. Loans that come with higher rates of interest such as many online loans are designed to be very short term. Perhaps in the range of a few weeks tops. If you are comfortable in the rate of interest they charge and any possible fees than they could be the right thing for you however, do have a plan from the beginning on how you will pay them back and when. It may be a more expensive way to borrow but they can provide cash in your pocket in a very quick manner and the qualifications you need to obtain them are very low. Usually a bank account and a source of income of some kind is all you need, not to mention some identification.

Be honest with yourself do not fall into the trap of “thinking” you can pay them back and not being able to. Also, do you best not to have to rely on them in order to get by week after week this will only cause further financial hardships. Another factor I stress with them is when making a plan on how to pay it back, make a plan on how you can save money so you can just turn to your bank account the next time. I knew someone who ate basically rice, beans and old fruit for a month in order to save some money and have a bit of a financial cushion. While this approach may not be suitable or necessarily recommended for most, it showed the persons determination not to let loans get the better of him. If you are looking at obtaining a short loan also be sure to check out their small print and terms. Also ask questions and read any possible reviews that may exist about them. This is not to scare you, but rather just encouraging you to do your homework to provide peace of mind. Are short term loans worth it? Actually a better question to ask is are they worth it if you are short on money and other means are not accessible? This is what you need to ask yourself. It is easy for someone with money to say no they are not, but ask someone who uses them occasionally to buy groceries etc and you may get a different answer.

One Comment »

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