Category Archives: Emergency Loans
It is always a good idea to make sure know how loans work before you take one out. With some loans the way that they work is quite unique and therefore you need to be completely sure of how they work so that you know what you are signing up for. An emergency loan is one of those loans that works quite differently to others and therefore it is worth understanding a bit more about it. Knowing how it is repaid is a very important part of this.
When do Emergency Loan Have to be Repaid?
So an emergency loan will not last very long at all. It is usual for it to be repaid in full on the next day that you are paid. The lender will tend to set up a direct debit so that the money will leave your account automatically on the next day that you are paid so that it is repaid. This means that you will not forget to repay it, which can be very useful as you do not want to forget as you will get extra charges or fees which no one wants to have to pay. The idea of having the money going on out on the next day that you are paid is that you will be able to afford the loan as you will have the money there. However, you still need to be careful.
How Can I be Sure to Repay it?
Having the direct debit set upwill help withthe repayment but you also need to make sure that you will have enough money available to be able to cover the cost of that repayment. If you check your bank statements you should be able to see whether the money that you have coming in will be enough to cover that cost. You will also need to think about whether you have any other things coming out on that day. If you have other direct debits, then once they come out then there might not be enough left for the loan or the loan may go out not leaving enough for the rest. This means that it is important to check this and make sure that there is enough. You will also need to make sure that there is enough left to pay the rest of your bills as well.
If there will not be enough money then you have a few options available to you. Firstly, take a look at the items that you are paying for and see whether you can reduce the cost. Perhaps switching to buying cheaper ones or using cheaper suppliers could get that cost down a bit. It may be too late to do that though, as it can take a while to organise. You could, however, make sure that you reduce your spending from now on, so that you only buy things that are completely essential and this will allow you to make sure that you are keeping as much money as possible to pay for the loan. This may not be enough though and you will need to think of ways to raise money for that you can pay for it. You might be able to sell things you own and no longer need, do some temp or freelance work, find some online jobs such as answering surveys to get a bit of money or other things like this. You will need to be sure that you will be able to repay the loan before you take it out so have a plan in place as to where you are going to get the money from.
Whether a loan will suit you will very much depend on the specific features of that loan. There are quite big differences with an emergency loan compared to many other types of loans and it is a good idea to get an understanding of what these are and then you will be able to get an idea as to whether this loan will be a useful one for you to consider or not. We are not always in the same financial situation either and so sometimes a particular loan will suit us but then at other times it might not, so that is something that we should take into consideration as well. However, as long as we know the main features of a particular loan then we will be able to know whether it will suit us in particular circumstances.
No Credit Check
Although all lenders have to do a credit check, the emergency lender will not take much notice of it. They will check if you have an income as they will need that reassurance to know that you can repay and they will also need to know when you get paid as the loan repayment comes out on the day that you get paid. However, they do not worry if you have a poor credit score, they will lend money to you anyway. This means that even if your financial situation is not good, you will still be able to borrow money form them.
Borrow Small Amounts
With an emergency loan you will normally only be able to borrow between £100 and £1,000 which can be very handy when you do not want to have large amounts of debt. If you borrow lots, then it can be much more difficult to manage the repayments and it can also take longer to repay. Borrowing just a small amount can mean that you can feel that you are much more in control of your money and therefore the loan can feel less stressful.
The emergency loan will normally have to be repaid very quickly. It tends to be the case that you will need to repay it when you next get paid. This will tend to be in a few weeks or even a few days time. This can mean that you will be debt free very quickly and it can feel good that the loan will not last long and you will not have to be concerned about owing money for very long.
It is also the case that these loans can be arranged very quickly. There are some emergency lenders that will be able to get you money within a few hours. This can be extremely useful as if you really do have an emergency you will need to get the money very quickly. Some will take a bit longer and it is a wise idea to check this if you do think that you will need the money really quickly. You will also find that there are some lenders that will also be able to lend money at weekends or overnight and this can be extremely handy if you have emergency outside of normal banking hours.
So, you can see that there are some features of these loans that are rather different to other loans and therefore you should remember these for the future. Then, when you are in a situation where you need to borrow some money, you will be able to make sure that you choose the right loan because you will have a good understanding of how the loans work. Of course, you will need to know about all of the other loan types as well so that you can carefully compare them.