Taking out a loan when you’re already struggling with your finances can sound counterintuitive, but there are actually a lot of benefits to doing this. Many financial advice services will strongly caution against taking a loan out if you’re in financial difficulties, and with good reason; if you struggle to make repayments, then all you’ve done is added to your problems rather than alleviated them with the loan.
With the right budgeting and attitude, as well as a favourable enough set of circumstances, a loan can be a serious boon for you when you’re trying to get your money right. We’ve provided a handy list of times when a loan might be right to help you escape the financial doldrums. Remember, these circumstances are highly subjective, so please do seek the opinion of a financial professional if you feel you need to.
If you find yourself short of a little cash just before a windfall (payday, for example, or an insurance payout), then a loan might be the perfect way to bring yourself up to speed. If you need a little extra money quickly and you know you won’t have any trouble paying it back within a week or two, then you might want to try out a payday loan lender – just make sure they’re reputable and trustworthy before you do so. Payday loans aren’t the bugbear they might have been made out to be; they’re just short-term loans with a higher interest rate than many. If you know you can make your payments quickly and on time, then you’ll be golden.
A loan is a great way to tide yourself over if you know that your income is going to increase significantly within a relatively short time frame. A prime example of this would be when you’re just about to start a new job; you might have spent a little time out of the world of work, which could mean that your savings and cash reserves are a little depleted, but that first paycheck is coming, you just need a bit of help to reach it. Any kind of loan is appropriate here; just make sure you don’t borrow more than you need, as you might come to regret it later.
There are many circumstances which might lead to you struggling to pay bills if you’re a homeowner. Perhaps you’ve finally finished paying off your mortgage, but cuts at work mean you’ve had to be let go. Maybe you came into a large sum of money as part of an inheritance or pension payout, but that money went on buying the house and now you’re in a spot of bother. Whatever the case may be, homeowners are in an excellent position to take out secured loans. Secured loans essentially allow you to borrow money against your house; if you don’t pay the money back, your house could be in danger of being repossessed. That sounds scarier than it is, though. If you’re on top of your finances, you’ll have nothing to fear from a secured loan.