How to avoid short term loans is a question we are often asked.
Short term loans should only ever be used in an emergency. If you find that you’re using short term loans a lot to keep the wolves from the door, you really need to take advice as soon as you can.
Is a short term loan right for me?
Life throws surprises at us all sometimes and every now and again, those surprises are financial.
It could be:
• something needs fixing in the house urgently,
• your car has broken down and you need it to get to work and ferry the kids to school,
• unexpected funeral expenses
• your glasses got broken and you need to buy a new pair from the optician, or
• your boss doesn’t pay your wages on time because the company’s in trouble
There could be any number of reasons why you suddenly need cash.
We all know it’s tough at the best of times to balance what we earn with what we spend. But we all try to do it and most of us do it pretty well, even if it’s a struggle sometimes.
And we all know how it feels like you’ve been kicked in the stomach when a big bill you didn’t expect or budget for throws your plans out of the window.
Advantages of short term loans
Short term loans mean that people can borrow between £80 and £2,000, paying back regular instalments over a period from two to twelve months.
You’re in control all the time. You know how much you’re borrowing and you know how much you need to find each month to repay the loan.
You can also get money in minutes. Applying is simple and the money can be with you within the hour.
Why should I try to avoid a short term loan
Even if it’s just a tenner a week, we should all try to save more. When we save more, we can treat ourselves. We can also cover the unexpected bills that short term credit facilities were designed to help with.
Short term loans are expensive compared to many other forms of credit (although they can be a lot cheaper than unauthorised overdrafts from your bank).
If you fail to keep up repayments on a short term loan, your credit score will be badly affected. That means that applying for more finance in the future, including for short term credit facilities, will become all the harder.
How to avoid short term loans
If meeting the bills feels like a monthly struggle, there are two things you can do to make things better. They are –
• find ways to earn more, and
• find ways to spend less.
Yes, it’s easier to say than it is to do. We all know that here! But here are CashLady’s top tips on becoming a household budget superstar.
Spend less to avoid short term loans
Let’s look at what you spend first because, in many ways, that’s easy to change than what you bring in.
By swapping suppliers, you can save hundreds every year. If you get your gas and electricity from the same supplier and pay by direct debit, that saving could go even higher.
Rent or mortgage payments
Mortgage companies are in fierce competition with each other so it might be worth approaching a broker to see what deals are available to you. If you’re renting, ask your landlord for a discount and be prepared to look at the market to see if there are any cheaper options open to you.
Lots of savvy consumers move their credit card accounts over to suppliers offering 0% on balances for an extended period of time. With average credit card interest rates running at around 20%, there are big savings to be made here.
According to retailers, the weekly big shop is dead. More and more Brits are going to 2 or 3 supermarkets a week taking advantage of price differences on the items they want and need. Is this something you should be doing?
Traditionally, being a member of a gym would set you back £30 to £40 a month. A couple of fast-growing gym chains are opening up new venues around the UK charging a tenner a month. Make the switch and you could save up to £360 a year!
Insurance companies rely on their customers to be too lazy to switch providers at renewal times. Collectively as a nation, they make billions from that. Make a note of all your renewal dates and be sure to use a reputable price comparison site to save money.
The internet has made things cheaper than ever. Before you buy something in the shops, check Amazon, eBay, and all the other retailers to see if they have the same or a similar thing for less.
Is there any way you can bring down what you pay for childcare when you’re out at work? Sometimes it feels like you go to work just to add to the profits of the nursery – it’s that expensive! The Government are bringing in new schemes to help parents with the cost – click here to find out more.
By following CashLady’s eight money saving tips, we’re confident you could save £2,000 a year or more. That’s £40 extra in your bank account every week. Not bad, eh?
Bringing in more money
How can you increase the money you’ve got coming in every month? Here are our thoughts…
Ask your boss for more hours
If it’s possible and it doesn’t interfere with childcare or in-work benefits, an extra 2 hours a day at minimum wage for 5 days a week could mean an extra £4,000 a year.
Ask your boss for a wage/ salary increase
Always tricky but if business seems to be going well and you have a good personal rapport with your manager or boss, it doesn’t hurt to ask the question. If you feel you can take on more work or responsibility, let them know.
Work extra hours in the ‘gig economy’
Got a car or a motorbike? Fancy working for Uber, Deliveroo, or Just Eat? You get paid per delivery and your profits could soon start to stack up.
Know how to do a nice design, fix a computer problem for someone, put together a website or write nice words? Google “freelance” and sign up with the service offering the types of jobs you know you could do well and in your spare time.
Did you know that millions of Brits don’t claim all the benefits they’re entitled to? A call to the Citizens Advice Bureau might reveal that there’s a whole world of benefits you should have been received but didn’t know anything about.
If you can find bring in an extra £2,000 a year and save £2,000 a year with CashLady’s tips, you’ve just got yourself a pay rise of £4,000.
You can do it and what’s more, you’ll enjoy it and feel proud of yourself afterwards. Be sure to let CashLady know how you get on.