Nearly everybody has experienced that sinking feeling as pay day floats on a distant horizon and one more bill lands on a doormat much closer to home. With full countries experiencing difficulties in paying the gas and electricity bill, the public sector wage bill and the multi-trillion overdraft, you are definitely not alone; but it may feel like this. One extremely popular solution to the discrepancy between the final demand date and pay day, is the near term loan. Government and charity organizations have given lots of the firms offering this sort of loan a rough time, but the basic rule of 'you should not borrow at a million percent interest ' is simple for specialists and counsellors to say when they have heating, lighting and a hot meal to go back home to. So should you or shouldn't you?
The quick answer and its longer cousin
The fast answer is that you should not, naturally. The choice answer is that now and then you could have to. Borrowing from "pay day" loan corporations, who opt to be known as "short term loan" companies, is dodgy business. But it can rely on who you borrow from and how sensibly you manage your debt. The basic guidelines are that if you are certain your wages will arrive on time and you are certain you can pay back on time then it may be a choice to borrow.
Counting the costs*
Of many companies who offer this type of loan Wonga is one company which has received some positive press and awareness for its openness and truth. Now the APR (annual rate) on their short-term loans is an imaginative 4214 %; the company aren't shy about this and you don't have to spend many years trawling their web site to find it displayed. The unvarnished reality of repayments is dependent on the term of the loan, and the easiest way to use the loans is by borrowing the smallest amount possible for the shortest duration. If things go bad they will discuss the problem and try their very best to come to a solution for you both. On the upside the company is amongst the few that do not charge an early repayment fee, so you can clear your debt earlier than anticipated at no extra cost.
Choices and last resorts
The near term loan should really be viewed as just that; something to get you through for unconditional essentials in the very short term. As an alternative you should also contact your creditor, to determine if they're going to be content to delay a payment - this is particularly crucial with utility corporations as their regulators take very dim views of firms willing to cut off purchasers who are experiencing short term problems. If all else fails then a temporary loan might be a temporary solution; just be absolutely sure it remains short term and a last resort. Creditors are usually always open and beneficial if you simply call them and tell them you are trying hard to survive. Many corporations will try and help you resolve the issue by working within your fiscal restrictions, so always opt for that option before resorting to a payday advance.
*Figures quoted correct as of 03 Sep 2012
Money Saving Spy is your 1 stop shop for the best deals online including, promo codes, free delivery offers and the newest freebie giveaway promotions. We also write regular money saving articles which are practical and packed with commonsense!
The quick answer and its longer cousin
The fast answer is that you should not, naturally. The choice answer is that now and then you could have to. Borrowing from "pay day" loan corporations, who opt to be known as "short term loan" companies, is dodgy business. But it can rely on who you borrow from and how sensibly you manage your debt. The basic guidelines are that if you are certain your wages will arrive on time and you are certain you can pay back on time then it may be a choice to borrow.
Counting the costs*
Of many companies who offer this type of loan Wonga is one company which has received some positive press and awareness for its openness and truth. Now the APR (annual rate) on their short-term loans is an imaginative 4214 %; the company aren't shy about this and you don't have to spend many years trawling their web site to find it displayed. The unvarnished reality of repayments is dependent on the term of the loan, and the easiest way to use the loans is by borrowing the smallest amount possible for the shortest duration. If things go bad they will discuss the problem and try their very best to come to a solution for you both. On the upside the company is amongst the few that do not charge an early repayment fee, so you can clear your debt earlier than anticipated at no extra cost.
Choices and last resorts
The near term loan should really be viewed as just that; something to get you through for unconditional essentials in the very short term. As an alternative you should also contact your creditor, to determine if they're going to be content to delay a payment - this is particularly crucial with utility corporations as their regulators take very dim views of firms willing to cut off purchasers who are experiencing short term problems. If all else fails then a temporary loan might be a temporary solution; just be absolutely sure it remains short term and a last resort. Creditors are usually always open and beneficial if you simply call them and tell them you are trying hard to survive. Many corporations will try and help you resolve the issue by working within your fiscal restrictions, so always opt for that option before resorting to a payday advance.
*Figures quoted correct as of 03 Sep 2012
Money Saving Spy is your 1 stop shop for the best deals online including, promo codes, free delivery offers and the newest freebie giveaway promotions. We also write regular money saving articles which are practical and packed with commonsense!
About the Author:
Monica Petherbridge is risk manager, doing debt consolidation and corporate or company loan. Graduated with a honours in finance and has a fascinating animal for a pet: a parrot named Ginko.
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