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Three Sensible Steps for Short Term Loans
When you are looking to borrow money, you need to think sensibly. This is especially the case when it comes to borrowing short term loans. The problem with these loans is that you need to pay the money back within 31 days or you will be falling into the traps of high interest rates and ruining your credit rating. If you are sensible, you can avoid all this.
Only Take the Money You Need
Just because the company offering short term loans is telling you that you can borrow £1000 does not mean that you need to borrow that amount. You should only take the amount that you really need so you can afford to pay it all back. What you need to think about is the amount of fees that will be added to the loan at the end of the month.
Most short term loans websites will detail just how much money you will need to pay back at the end of each month for each £100 that you take out. It is worth looking into this to make sure that you can afford the loan and the charges on top of that.
Pay off the Loan at the End of the Month
If you can, pay off the money at the end of the 31 days; this will help you protect your credit rating. There are times that you will find that you are struggling financially but you should make your debts your priority. You will benefit by being out of debt and then you can start spending money where you need to.
You may find that you cannot pay all of the loan off, even though you thought you could. Rather than burying your head in the sand, take your time to call the short term loans company and explain your situation; you could find that they are understanding. Arrange another date to pay off the short term loans and offer to pay off as much as you can; at least cover the charges that will be added on.
Only Borrow from One Company
The worst thing that you can do is borrow short term loans from lots of different companies. There is a reason why you will be limited to the amount of money that you can take out; you need to pay it all back at the end of the month. Borrowing from too many companies will only overstretch your budget and will look worse on your credit rating.
The same goes for borrowing too many short term loans in a short space of time. You cannot rely on one to help with your budgeting. If you find that you are doing that then you will need to start looking for other ways to budget your money. Borrowing too much in a short time will make you look irresponsible; this will make you seem like a high risk and there is less chance that other lenders will trust you enough to loan you money.