Short term loans are typically a loan scheduled to be repaid in less than twelve months.
There are times when we experience an unforeseen circumstance and have a need for extra cash in the short term. When you are in this situation and need some short term cash straight away, people can often be tempted to take out a payday loan. These are often presented as a quick and easy solution to all your financial difficulties and available in just a few clicks. Too often, as we have seen in the media, the ease of which these loans can be taken out does belie the fact that they can cause people to become trapped in a spiral of constant debt, compounding interest and growing repayments.
Before you take out a short-term cash loan, or any type of financial product, you should consider whether you need this loan. Here are three questions you should ask yourself:
How much cash do you need to borrow? Think about how much cash you actually need from the short term loan to meet your needs during this time. You should try not to borrow more than you actually need as you will be repaying this and interest on the total borrowed.
Do you really need the short term loan? Think about if there is another way you can bridge your gap or without the need for a loan. See our blogs section for more information about how you can source extra cash without borrowing.