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.
If you are considering online loans, then it is a good idea to make sure that you have a good understanding of what they are and how they work. The loans are a bit different to more conventional loans and so you will be wise to find out more. You will find that you will be able to find out more in a selection of places.
You will find that you will get quite a bit of information form the websites of lenders that offer this sort of loan. They should tell you how the loans work and give you other information as well about them. This can be extremely useful, but it is worth remembering that they will want you to take out a loan. This means that they will only include all of the positives of the loan. As we all know, there are advantages and disadvantages to all loans and therefore we need to make sure that we look at other sources of information as well so that we can get a more balanced point of view.
Comparison websites may have some information on them which could be handy. However, they will also want you to take out a loan as they will make commission on any leads that they make which follow through to someone lending. As they deal with different lenders they may not be biased in the same sort of way as a lenders website but they will still be likely to only have positive information.
There are some websites that generally deal in personal finance or money. These can be much more helpful because they will be far less likely to have a need for bias. However, do be careful as you could find that there will still be some people that will perhaps make commission on leads but look like a general site. On a UK website, they have to declare if they have affiliate links so that should help you to be clear on whether they are likely to have bias or not. Forums can also be good places as people will discuss their experiences and this might hep to get a better understanding of what it is like to have a loan like this.
People you Know
It can be a good idea to ask people that you know about their experiences with online loans. They will be able to tell you what it is like to actually have a loan like this and this can be really useful. You will be able to get a feel for the actual borrowing process and repayments. They will be able to tell you about the pros and cons, why they chose that loan and lender and all sorts of things which could be extremely handy in allowing you to learn more about them.
This is a long list and it might feel like it will be a lot of effort just because you want to find out more about the loans. However, it is a good idea to think about all of these things so that when you do need a loan you will know what it might be like to have one like this. It is important because if you are picking between loans you need to make sure that you are picking the one that is most suitable for you. If you wait until you need money, it can be too late to do this level of research as you need the money quickly. You may also be worried and not really in the mood for it, so it can be wise to do it sooner rather than later.
There are some people that do get concerned about dealing online and worry about safety of doing any sort of banking online. It is right to be cautious, but there are things that you can do which should help you to make sure that things are safe for you which will help you to gain confidence with regards to dealing online.
Firewall and Virus Checker
It is a good idea to always make sure that you have a good firewall and a virus checker on your devices. This will help to protect you against a lot of the nasties that you could encounter while online. You are at no greater a risk with online banking than you are with any other internet use, but it is extremely important that you have these in place anyway.
Watch Out for Phishing
Phishing can be a genuine concern for many people and it is something that you need to be careful of. There are simple ways to protect yourself though. If you only bank by directly accessing the bank yourself through your PC or device or through telephoning yourself then you will know they are genuine. Do not follow links in emails, use search engines to look up the website or give any details over the telephone unless you telephone in, then you will not get caught out in any of the nasty scams that can happen to some people.
Keep Things Private
It is also important that no one can see your details as you are banking online. Therefore, try to use a private device or PC in a place where you are not overlooked. If you have to use it in a public space then make sure no one is looking while you are doing it. If you use a public computer make sure that it does not save your details and that you close all tabs fully before shutting down the browser. Also check before using it that it is secure.
It might also be that you will be concerned about trusting the lender. A lot of online lenders can be fairly new and therefore not well known. However, this does not necessarily mean that they are untrustworthy. You can check for this too.
If you read reviews online of a lender, then there is a chance that they will be biased. It is also likely that people are far more likely to write a review if they are unsatisfied, so bear that in mind as well. However, you should still be able to find out a bit about them. If you have review sites that you trust, then you will be better off going to them. Also, you could ask people you know, if you know that they have used online loans.
It is always a good idea to go to the website of the potential lender. You should be able to get an idea about them from this and it will allow you to be able to check what they are like and whether you feel that you want to use them. It might have information about the company on there and you should just be able to get an idea of how they feel by the way the website is worded and set up
It is also a good idea to contact them for yourself. This could be by email, through their website or by telephone. Use the form of contact that you feel that you would use if you were borrowing from them and ask them a few questions. This will allow you to be able to find out what they are like with regards to how quickly they respond, how polite they are and how helpful they are. This should help to build up your impression of them.
It is always important to make sure that you repay your loans on time. This is because a late repayment will lead to extra charges and fees which no one will want to pay. Therefore, it is always a good idea to make sure that you are confident that you will be able to repay your loan.
Check out Cost First
It is wise to make sure that you are aware of the cost of the loan before you take it out. Many people will not do this and they will just focus on the benefits of having the loan and not think about the cost of it and how they are going to repay it. This can lead to them missing a repayment or not being able to make it in full and they will end up facing higher charges as a result. Therefore, it is so important to know what to expect with regards to the cost so that you are well prepared. Therefore, find out form the lender how much you will be expected to repay and when you need to repay it and then you will be prepared.
Check You Can Afford it
Do make sure that you make use of the figure though. Make sure that you are aware of what it is and then check you bank statements to see whether you can afford it. It is worth taking a look at how much money you tend to get paid and what you pay out on essentials and work out whether there is enough money left the repay the loan. You need to bear in mind that there will be things that you have to pay, such as contracts, direct debits etc as well as things that you will need such as food that you will have to buy. Make sure that there is not enough money and if it will be tight or there is not enough then you will need to come up with a plan.
Figure Out Extra Ways to Cope
It is important to have a think about what you will do to manage more easily. It might be that you will be able to think of some ways that you can earn more money. It might be that there will be an opportunity to do this in the job that you do or you might need to think of some different ways to do it. It could be that you will need to look for an additional way to earn. Finding a second job may not work as you may not get paid in time but you might be able to do some temp or freelance work that will bring in some money. It could also be the case that you might be able to reduce how much you are spending on your essentials so that you can free up some money to pay the loan. Whatever it is, you will need to be sure that it will work and that you will do it, so that you are able to repay.
Have a Backup Plan
It can also be a good idea to have some sort of a backup plan where you are able to have a few ideas of things that you can try just in case you are in the situation where you feel you will not be able to afford to repay. It could be that you will decide that you need to think of some money making ideas, perhaps sell things, take on much more work or whatever to repay it. Have a plan in mind that you are sure will work so that you are able to ensure that you will be able to afford the repayments even if things do not quite go to plan.