When you need a loan, you have several options to choose from. Customers that need loans often only need the loan for a short period of time. There are three primary ways for people to get short term loans.
Emergencies come up, sometimes you are left scrambling to find the cash to pay bills. You know that payday is coming, but there just is not any way to make the cash that you have stretched until you get paid.
You do not want to ask family or friends for the money, so what do you do?
During a very hard time, it is comforting to know that there are resources we can take advantage. Some may not even know about these. That’s why it is essential that people get acquainted with all loans possible. Here are a few of them.
The most conventional way to get money is through a bank loan. Getting money from the bank gives consumers some key benefits. First, the repayment terms are generally longer with a bank than with other loans.
Where a payday lender might only give a few weeks to repay the loan, a bank would be willing to give several months to repay. Second, banks typically charge lower interest rates. Finally, repaying a bank loan can increase your credit score and lead to even better rates in the future.
With these benefits in mind, it is important to note the drawbacks of getting a loan from a bank. Banks will check your credit history and will deny loans to those with low scores. Banks have minimum loan amounts that may exceed what you need.
This means borrowing and paying interest on money that you never wanted to borrow in the first place. Banks are great lenders for people with good credit who need a medium-sized infusion of cash.
You can apply for a bank loan. However, this can be a long drawn out process. The bank will check your credit score and your financial standing. This could take quite a while. This is definitely not an option when you need a loan fast.
Local money lender
You could also ask for a loan from your local moneylender. However, borrowing money from a local moneylender is often fraught with risks.
You never know how your local moneylender may behave if you fail to repay on time and you could find yourself in a mess.
This is another loan option online. This is the new way of borrowing and lending money at a low interest rate to pay off a high interest loan such as a credit card payment.
For a peer-to-peer loan, you need to apply online at the proper website that offers such loans. Registration is free but the process may take some time and you may have to wait a while before you get your money.
One of the fastest options to get a loan is a payday loan. This is the best option to get a loan when you need money in a hurry. Some people need money urgently to pay off a high interest loan such as a credit card payment.
In such a situation, you need the money to avoid further penalty on your monthly outstanding amount. A payday loan allows you to do exactly this.
A payday loan is also easy to obtain. All you need to do is fill up a short form online for a payday loan. There are many websites where you can find such application forms for a payday loan. You must fill in all the required details and you could get a response within a day.
A more recent trend in the lending industry is the rise of payday lenders. At a payday lender, your paycheck is your collateral. Payday lenders will set up an automatic withdrawal from your bank account on the day that your wage is deposited, so there is no reason to worry about mailing in a payment.
Even the smallest loans can be taken out with a payday lender, so they are an excellent solution for people that only need small loans. The problem with payday lenders is that they can lead to a deadly debt cycle.
Over time the fees add up, and the short repayment period makes payday lenders charge extremely high interest rates. This is not a good long term solution, and you must be wary of excessive payday loans.
One of the oldest forms of credit in the world is the pawn shop. Here you can take your possessions, pawn them to the shop in exchange for money, and collect the items once the loan has been repaid.
Pawn loans can be for any amount, so long as it does not exceed the value of the items pawned, and are generally on a ninety-day repayment schedule. Pawn shop loans are not without their drawbacks, however.
Getting a loan from a pawn shop means giving up control of one or more of your possessions. You will not have access to these possessions and cannot use them during the duration of the loan. Rates are usually reasonable, but you should always take a look and make sure.
You have choices when you need cash on short notice. Be careful choosing the lender that you approach for money and you will get the money you need now without mortgaging your financial future.
In most cases, your loan amount could be deposited in your bank checking account within a day. There are no credit score checks and you can apply even if you have a poor credit score. There are instant payday loans as well. This is probably the fastest options to get a loan.
Situations That May Lead To Needing A Loan
How do you handle juggling all the bills that are due and providing food for your family when you don’t have enough money for it all? If you find yourself in this situation, get a cash advance loan so you can do it all.
When your paycheck hits your bank, is it going to be enough money to cover all your bills and feed your family?
What do you do if a few bills are higher than usual? Do you risk paying those bills late so you can feed your family?
Of course, anyone would choose to feed their family first if it comes down to having to make that decision. You don’t have to hassle with the late fees if you get a payday cash advance loan.
Sometimes we are in such a hurry to get the bills taken care of and paid that we tell ourselves that we will be able to “make do” with the $100 that is left for two weeks of food and gasoline. It is possible, in some circumstances, to make a small amount of money last.
You just have to be extremely careful with what you spend your money on. But, it always seems that even if you have every dollar planned out something either comes up or for some reason your calculations were wrong. Instead of trying to scrimp by, get a cash advance loan.
Most people have the majority of their bills due at the beginning of the month. If the beginning of the month falls a few days before the next paycheck, get a payday loan.
If your mortgage, car payment, insurance premium, electricity bill, and phone bill are all due within the first week of the month, you should prepare yourself by setting money aside from the previous month’s mid-month paycheck.
This is when a good family budgeting plan can come in handy. You should budget money from each paycheck for various bills regardless of whether they are due currently or after the next paycheck or two.
Some people tend to overspend the paychecks that come when there are no bills due, but then they struggle with the next paycheck. If you budget each paycheck for the upcoming bills and not just the ones that are currently due, the amount of your expendable income will be evener.
Even so, emergencies do come up at the worst times that can throw a budget into a tailspin. If you struggle to pay your bills because they are due all at once, a cash advance loan can help you get back on track.
It does not matter how good you are at budgeting your money and handling your finances, emergencies come up that will need to be taken care of and can be handled with a cash advance loan.
Just when you think everything is going smoothly your vehicle breaks down, your electricity bill is higher than normal, or a tooth gets chipped or broken.
Even when you strictly adhere to a tight budget, these types of situations can be difficult to handle. It’s good to know that you can get a payday advance loan if you have a steady income.
You also need proof of income and proof of identification. You also will need the numbers of your bank account so the money can be deposited directly into your account. No longer will you worry and fret over every single dollar because you do have an option for emergencies.
People who live from one paycheck to the next will sit down and count every single dollar to determine what bills definitely need to be paid and what bills may have to wait so they are able to put food on their family’s table.
Instead of trying to juggle it all and dropping a ball or two, get a payday cash advance when times get tough so you can keep all the balls in the air.
However, there should come a point that you will not have to depend on falling back on a cash advance loan. You may need to consider starting a budget plan or perhaps consider getting another part-time job to help make ends meet.
Be Smart When Taking Out Loans
If you are considering taking out a loan there is so much to learn before taking the leap. It is a must that you play it smart when taking out a loan, else you could find yourself in serious financial trouble down the road.
Different Loans Available For Application
Loans are made to individuals who find themselves in need of money for one reason or another. There are several loan types that one can obtain which include personal loans, payday loans, and auto loans.
Each loan will require fees and interest to be paid when it is borrowed. Many financial institutions offer loans to suit the needs of all, and one can easily choose the loan company that offers the best rates to ensure an affordable loan is attained.
Step one of playing it safe begins when you are applying for the loan. In an industry where there are many less-than-honest people lurking, it is essential that you apply for a loan only with a company you feel comfortable with and have experience with.
You should never give out your personal details to just any company as you could become the victim of identity theft, wire fraud, etc. using a company that has been around for a while with a solid reputation will make you feel more at ease and reduce the chance that a bad experience will be had.
Read also: Bridging Loans Explained And Their Benefits
Only Apply For Loans That You Can Repay Back
It is a must that you apply for a loan only if you are certain it can be repaid on the terms indicated. Should you fail to repay your loan, interest fees and late payments can cause the monies owed to skyrocket, leaving a debt far more than you could ever imagine.
Be sure to take a few needed moments to research the company that you are looking to use. You want to understand the terms of the loan, the amount of interest that will be paid, the full amount of money that you are receiving and the company’s reputation.
Do not settle for the first loan company you see and check interest rates of as many companies as possible. Finally, use loans responsibly, no matter what type of loan that interests you.
Only take out a loan if it is a true need and not to spend on a shopping spree. Using loans responsibly and staying smart will help keep you on the right financial path and your credit intact as it should be.
4 Reasons Why Lenders Turn Down Your Loan
Most people need to apply for a loan once in a while, whether it is a loan for a home, automobile, or to catch up on bills. Over the past few years, there has been an economic downturn, and banks have scrutinized these loan applications thoroughly.
Some loan applications will get denied for various reasons. The lender will let you know why your loan application was denied so that you can begin to work on those issues.
The lender will also guide you on how to repair your credit problems. It does take work on your part, but it will all be worth it in the end. Once you have repaired these problems, you may reapply for a loan.
Make Sure You Have a Clean Payment History
The lender will look into your payment history if they find you are not making consistent, regular payments this is a huge red flag. Pay all of your bills regularly each month, including credit card payments.
These bills include utilities, cable, automobile insurance, car payments, and mortgage. If you have additional debts, they must be paid off before adding more debt. Often times, lenders will not lend to those who have a lot of debt and have trouble paying those current debts.
Once you have shown a pattern of paying each month, this is an indication that you will continue to pay loan payments on time. At that point, you may apply for the loan again.
Marriage Problems Pile Up
If you are divorced and have good credit, you might apply for a loan. If you get denied, find out the specific reasons. If one reason is that when you were married, the bills weren’t getting paid on time, explain to the lender that it was your spouse who was careless with money.
If you have any bills in your name only that you have been paying off, this could get you that loan. If you can show the lender that you are responsible, and you do pay debts back, you will qualify for a loan.
You Won’t Get It If You Can’t Return It
Ideally, you should have a full-time income if you desire a loan. The lender is looking for you to have a stable, long term job, along with good credit to even consider loaning you money. If you lose your job due to downsizing, or the company is closing their doors, then you need to seek other employment options.
Check your credit reports on a regular basis, pay off your debts, and prove to the lender that you can pay back a loan. Lenders do not want to risk a loan to someone who might not pay it back.
A Healthy Loan
One thing that you may not have thought about when asking for a loan is your health. Lenders consider your employment, your credit rating, your payment record, how much debt you have now, and your health issues when you ask for a loan.
The lender has to be confident that you will be able to pay back the loan. That seems to be their biggest worry when loaning monies. People such as the elderly, those with a progressive disease, those that are overweight, and even people that smoke may not be good candidates for loans.
There is a chance that those people may not be able to hold a job or may lose their jobs if their health issues get worse. The answer is taking good care of yourself by eating right, exercising, and stop smoking.
Turned Down For A Loan? Do This
The average credit score for Canadians is approximately 700, and the perfect score is 900. While the average score for consumers is still considered to be good, the fact is that many are struggling with their finances and have a lower credit rating than 700.
In fact, some lenders will deny a loan request if your credit rating is at or below 620. If you have been turned down for a loan request, there are a few steps you should follow to take control of your financial situation.
Review Your Credit Report
Consumers should be aware of the information being reported on their credit report. Because this information can change frequently, you should request a copy of your credit report when you are denied credit.
Some of the information, such as your outstanding balances, may be lagging by a few months. However, you should look for any information that is grossly inaccurate.
Fix Any Errors
By reviewing your credit report, you may discover that some accounts that are not yours are being reported. In some cases, information related to late payments or pending litigation is not correct. These are just a few of the factors that could negatively impact your credit rating through false information.
If you notice any errors, contact the creditors and the credit bureaus to correct the information. It may take several weeks for this information to be removed, so begin this effort soon.
Improve Your Credit Rating
False information being reported on a credit report is one factor that can result in a lower credit rating, but sometimes accurate information is bringing your credit score down.
For example, some late payments reported on your credit report are accurate, or you may have high outstanding balances. When you improve your financial standing, your credit rating may increase. This can take time, but it is worthwhile.
Settle Your Debt
For some, being turned down for a loan is an eye-opening event, and this may signal the fact that you are struggling financially. When your debt balances and monthly payments are too high, you may consider seeking assistance from a debt settlement firm.
By speaking with a company specializing in bad credit in Toronto, such as Paddon & York Inc, your balances and monthly payments may be reduced through negotiations with your creditors. Professional negotiators can work on your behalf to achieve the best results possible.
Being turned down for a loan can be stressful, but it also should indicate that you need to take additional steps to improve your financial status. Utilize these tips to take control of your finances.
Read also: When a Loan is Good Financial Sense