Taking out a loan from a loan company for just a month may seem a little strange at first but it is something that more and more people are choosing to do. Although these short-term loans are fairly easy to find and to obtain – even if you have bad credit – you really have to weight up the pros and cons attached to them before making the decision to take one out.
How 1 Month Loans Work
One month loans are similar to payday loans but not quite the same thing. Both are available to people who are employed and have a verifiable source of income and both are also often available to people who have less than perfect credit. The usual minimum requirements are that you are over the age of 18 years old, are a legal UK resident, have a verifiable source of income and an active bank account.
Unlike many payday loans through one-month loans are due in full on a pre-agreed date that is no further in the future than a month from when you received your loan funds. Usually, on the appointed day the loan company will automatically authorize the loan repayment to your debit card or have it transferred out of your bank account. At this time the fees due will be taken out as well.
How High are the Fees Attached to 1 Month Loans?
The fees and interest attached to short-term loans are somewhat higher than those associated with longer terms loans, even the lenders admit that. This is because these loans are relatively easy to get, funded very quickly and offered mainly to people with a less than perfect credit record. These rates are not as high as many people think though -the law in the UK now makes sure of that – and for many people, the emergency cash solved a crisis so they feel it is a relatively small price to pay.
Alternatives to 1 Month or Short Term Loans
Because of the higher fees attached to them, many financial ‘experts’ advise that short term loans should really only be used as a last resort. They say that before you take one out you should have exhausted all your other possibilities. Here are the pros (and cons) however) of some of the alternatives commonly cited by financial experts.
Borrowing from family or friends
Asking family members or friends to help you out of a tight spot is advice that almost all financial experts give. The problem is that in this day and age most people don’t have the cash to spare and even if they do if you do not manage to pay them back properly the damage to the personal relationship can be hard to fix.
Going to eBay
Some people are surprised by just how much they can get for stuff that has been lying around their house unused for months, maybe even years, if they put it up for sale on a site like eBay.
The downside to this is that eBay sales take at least a week – and it can be up to a month before the seller actually gets their cash – and if you are in dire need of funds that just may be too long.
Getting an Extra Job
This is a favorite piece of advice from the experts but sadly having one job is hard enough these days let alone being lucky enough to find an extra one. Working overtime is another option often suggested but again, this is something that is hard to come by for most people.
As you can see these are all great ideas but not always very workable. For many people even after they have considered all of these a short-term loan is still their best option.
Making 1 Month Short Term Loans Work for You
Most people take out a 1 month loan because they need cash fast and these loans can be funded in just a few hours in many cases. The best way to make such a loan work for you is to plan just how you are going to pay it off on time. A responsible lender will, when considering your application, only approve it if they think your income will allow you to pay it back on time.
If you are approved for a short-term loan ensure that you know exactly when your payment(s) are due and that the funds to cover the payment are in your bank account in plenty of time. Only borrow as much as you need and can afford to pay back and if you do anticipate a problem covering your loan payment, call your lender in advance so that a workable solution can be discussed.