If you’re experiencing short term financial problems, borrowing can be an ideal solution. There are various types of loans and options open to you. It’s important to get an understanding of your options before you decide which one is right for your situation. Take a look at these top five short term borrowing options available.
1. Payday loans
Payday loans have quickly become the most popular short term borrowing option. Designed specifically for short term cash flow problems, payday loans are usually provided for a maximum of 30 days. You need to have a bank account in order to receive the money and the payment of the loan will be taken in full, along with added interest on your next pay day. It’s important to choose a responsible lender such as Wonga, as there are a lot of loan sharks out there. You can get the money in your account the same day and there’s even the option to pay it back early.
Temporary overdrafts can often be arranged by your bank. Allowing you to go over your balance, the overdraft will usually come with added interest. It’s worth noting that some overdraft facilities can cost more than getting a payday loan. Therefore it’s important to compare your options before choosing this method.
3. Personal loans
Personal loans were once considered to be the most popular borrowing option available. Allowing you to borrow up to £25,000 unsecured cash, this option is ideal if you need a lot of money quickly. The term of the loan varies and short term options are available. However, before you choose this option you may want to think about re-mortgaging first. The Express has published an article highlighting the benefits of re-mortgaging instead of personal loans.
4. 0% interest credit cards
They aren’t as readily available as they used to be but 0% interest credit cards can be a good option. The 0% interest deals typically run for 6 months and you won’t have to pay a penny more than you spend. If you choose this option be sure to pay off the balance on time to avoid it having a negative impact on your credit report.
5. Borrow from friends and family
It may feel awkward asking friends and family for help, but it can be a much more affordable option. You won’t have to worry about interest and it’s much more relaxed than borrowing from a bank. Just be sure to pay the money back as soon as you can to avoid any potential arguments.
These are just five ways to borrow the money you need in the short term. Make sure you take both the advantages and disadvantages of all options into account before choosing what is right for you. No form of borrowing comes without its disadvantages. If you make the wrong choice it could end up damaging your credit rating and further dent your finances. No matter which avenue you choose to go down, be sure you’re borrowing from a reliable source.