We’re all familiar with the phrase ‘Credit Crunch’, or at least we ought to be by now. However the world of the personal loan and cash advance is far from dead and despite the on-going recession loans, both short and long term, continue to be a source of finance for many people. While many loans are used to pay for a holiday, home improvements or a new vehicle there continues to be a trend for finance to be used to cover some less than essential purchases, ranging from cosmetic surgery to exotic pet purchase! Finding finance is not always easy – though many banks seem to continue to display a Cavalier attitude to lending – and choosing to borrow money is never an easy decision to take. Here are a few ways to make the most of the money you have and a few ideas for finding the right loan (and using it wisely).
Habitual Savings
Despite consistent warnings from financial experts, many people have less than one month’s salary stashed away to help in lean times. With budgets stretched to breaking point, it’s not a great surprise that many of us have dipped into our savings and have very little spare to recharge them. However, financial experts recommend storing the equivalent of three months’ salary to help you through, should you lose your job or be unable to work for a period. In difficult times it can seem impossible to find this type of spare cash but making small cuts in the daily out-goings can add up over time. Simple things, like making your own lunch to take to work, walking, cycling and taking public transport where possible, can cut daily out-goings. On their own these savings may seem minimal, but over time they’ll build to a substantial amount. Regular financial health checks – to see what money is going out each month and where – can also help you to establish what bills can be cut out completely and what money can be saved.
What Budget
Budgeting carefully (research suggests that nearly sixty per cent of households don’t actually have a budget) is crucial to managing the money that you have coming in. This can be even more important if you do need a loan, or cash advance, to help you through a difficult month or two. By carefully planning what money you have available and sticking to your budget you’ll be in a better position to meet essential out-goings including mortgages and loan repayments. Thinking twice before non-essential purchases is also an important habit to get into, while avoiding the credit card trap is also useful. Purchasing on a credit card is more expensive as additional fees (although small) for using your card will add a significant percentage to the purchase itself.
Emergency Services
If, and it’s not an uncommon in most households, you find that a sudden and unexpected expense is heading your way, consider your options carefully. In addition to traditional lenders, there are a range of smaller firms offering a cash advance against your salary. When it comes to urgent repairs to your home or car, or sudden medical bills, many people simply find that they have not got ready cash to cover the expense. If you have a household budget and simply need a short term loan to cover an emergency bill a cash advance can make a sensible route to covering the costs. As with any loan it’s important to be sure that you’ll be able to cover the repayment – more so in the case of short term loans as interest rates will be high. Before rushing into this type of loan consider the impact in the following months that the cash advance will have on your income and expenditure and be sure that you can meet the repayment deadline.
While finance can be hard to come by, and many people are rightly reluctant to take on further debts, unexpected bills can mean taking on additional finance. By managing your monthly out-goings effectively and making savings where possible, short term loans can offer a sensible way in which to pay important (and unexpected) bills.
Bob Emerald is a freelance writer who has noticed that with the cash advance markets growing rapidly, many individuals are finding this type of loan can make a big difference when faced with unexpected bills. However, as they are a new type of finance, many consumers are still uncertain as to whether they should be used.