You must have read everywhere “Loans can help tide over”. If you are running out of money, you can borrow money from a direct lender to fill the gap. It is very easy, isn’t it? If you look deeper, you will find that many people, who borrow money when they fall short of cash, end up falling behind repayments.
This scenario is very common that about 60% of borrowers struggle to keep up with repayments. Here doubts start to flash across your mind: if it is an outlandish claim or a skulduggery that lenders use to trap you into debt. Many people especially those who are living from paycheque to paycheque face monetary problems at the end of the month.
Though some people try to spend money cautiously in order that they do not go beyond budget, they face problems when an unexpected expenditure pops up. However, this problem is common with even those people who are earning a good amount of income.
A large number of people blame interest rates and believe that it is just a claim to persuade people to take out a loan. Before you reach to the conclusion, you should understand where you slip up.
Following the crowd
When you need money, the first thing to do is researching where to get a loan in Ireland with bad credit. If you research beforehand, you will have an idea of different interest rates charged by each lender.
You can easily compare interest rates and choose the most affordable one. A good rule of thumb says that you should do this research work in advance. Many people realise to find out an affordable lender when an emergency catches them up.
Unfortunately, you have not left enough time to do so. Since an emergency is at your doorstep and time is running out, you contact your friends and family to be upon direct lenders that charge affordable interest rates.
This is when you take a step toward debt spiral. Your financial condition is different from your friends and family. They likely found that lender suitable according to their financial position, but it cannot work in your favour. Just because something worked for your friends, it does not mean that will work for you too.
Not using an online calculator
“Loan can help you tide over” does not mean that you will borrow money without realising your affordability. For instance, if your laptop budget has fallen short of £150, you may be tempted to borrow money, but financial experts suggest you should evaluate if you could pay off in full on the due date.
Use online calculators to know the total cost of the loan. Do not forget that you have to pay the interest along with the money you borrow. Therefore it is paramount to know how much it costs you. Likely, you cannot manage to reimburse the loan if you borrow £150. If you are planning to borrow money, make sure that you can manage to repay it on time.
Borrowing for recurring expenses
Short-term loans have been designed to help meet unexpected expenses. The ideal situations for borrowing money are medical emergencies, car repair, and the like. However, if you are looking to borrow money for everyday expenses, you will end up falling in a debt spiral.
To make ends meet, you should try to cut back on your spending. The best way to be on top of your expenses is to create a budget to keep tabs on your monthly expenses. If you find budgeting hard, you should use apps. These apps can track your expenditure and alert you when you are on the verge of overspending.
When direct lenders promote their financial products (short-term loans) as they can help tide over, it does not mean that you will borrow money just for the sake your budget has fallen short of cash. You should evaluate your affordability before taking out a loan. Try to borrow money from a lender that offers loans at affordable interest rates. Try to research beforehand so that you do not need to bear the headache when an emergency pops up.