27 Jan When Should You Consider a Short-Term Loan?
To prevent this process from repeating and miring you in an infinite cycle of debt, the FCA has limited the number of rollovers to two. They also require lenders to provide you with an information sheet before you roll over the first time, to ensure you fully understand the process, and that you have access to advise on other ways to manage your debt.
The fast cash granted by a short-term loan is alluring to many, so much so that it can blind them to the dangers of recklessly entering into an HCSTC agreement. The high costs and short repayment period of these loans mean they should not be entered into lightly, nor frequently if you have any other choice.
So, when is it appropriate to take out a short-term loan? At Now Loan, we advise you to only consider this option in emergencies, such as:
• Private Medical Expenses. If you or a loved one requires urgent medical attention, the last thing you should have to worry about is how to pay for it. When weighed against your health, interest rates become trivial.
• Loss of Income. It seems counterintuitive to suggest a loan when you've lost your employment. However, a sudden loss of income may leave you incapable of paying for rent, utilities, or even food. A short-term loan can cover the costs until you find a new source of income.
• Car Accident. Losing access to transportation can completely upend your life. You may have no way to work, or be unable to get your children to school, or meet any number of necessary obligations. A short-term loan may be your only way to quickly make repairs and get back on the road.