Many people sometimes spend more than they should or need a little extra cash to pay for something that came up out of the blue. There are several ways to deal with this kind of financial emergency. Which one is best for you depends on how much money you need to borrow and your own financial situation. Here are some things you can do.
Payday Loans
People who get payday loans get a small amount of money, usually less than GBP1,000. This has to be paid back by the next time they get paid. The lender charges a fee that is equivalent to a high APR. But this can be a good way out of a short-term problem. Even if you have bad credit, you can get a payday loan quickly and easily.
Guaranteed loans
People with bad credit may also be able to get a secured loan. This is when someone takes out a loan against the value of their home. This is good for people who own their own home but have bad credit and need a lot of money. This could be a good choice for someone who needs money quickly, like for a wedding. People can borrow up to 125% of the value of their home's equity, and they have up to 30 years to pay it back.
Unguaranteed Loans
Normal loans from a bank or loan company are not backed by anything. Most of the time, people with good credit are the only ones who can get these loans of up to GBP25,000. Most of the time, you have up to 10 years to pay back the loan. It can be hard to get these loans.
Check on a credit card
With special checks, many credit card companies let their customers use their credit cards to get cash from an ATM. These can be useful in places that don't take credit cards. For example, if you buy a new car with a credit card, the seller may charge you a fee. This could make your total cost more.
People should know that some credit card checks have a higher interest rate than regular credit card purchases. If one of these is yours, it might not be the best way to get short-term credit. Check the annual percentage rate and make sure you read the fine print.
Overdraft That Was Allowed
This can be a cheap way to deal with short-term money problems. If you have a good relationship with your bank and make money on a regular basis, you may be able to get an overdraft. This usually comes with a reasonable interest rate and is paid back automatically as soon as your paycheck arrives. Make sure you don't go over the limit, though, or you could end up with huge bank fees.
No matter which option you choose, you must pay back the loan on time and in full. This will help you keep a good credit history and make it easy to get more credit if you need it.
