What should you consider before getting an emergency loan?

A large unexpected bill can be quite stressful if you’ve been struggling to save money. You may be able to get an emergency loan from a payday lender, or even your credit card company, depending on your situation.

However, before applying, consider the alternatives that can save you money in the long run. Loanpig can offer you payday loans for bad credit in case you need an emergency loan to meet your expenses.

Let’s discuss some do’s and don’ts while accepting an emergency loan from a certain lender.

Explore all the options

Asking for a loan from relatives and friends is another alternative if you think they could help you, as this is often the last option people consider when looking for a quick boost.

You might be surprised at how many family members and close friends would love to help out if given the chance, but pride or unwillingness to put people in that situation can be very good reasons not to. choose this choice.

The loan can be as formal or informal as the parties involved want, and it is likely to be your most affordable choice.

stop and think

Imagine your boiler breaks down, you don’t have the money to fix it, and winter is approaching when you’re without a boiler. Consider one of these choices:

Get several estimates to determine the most affordable repair cost, which may be less than you expected.

  • Cheaper alternatives

A quick option could be to buy electric heaters, which could be much cheaper than fixing the boiler.

Since borrowing always requires repayment, it really should only be the last choice.

Do not opt ​​for an expensive short-term loan

Short-term loans can be quick and relatively simple to obtain. However, they can be extremely expensive, and if you can’t afford to pay them back when they come due, you could end up in an endless cycle of debt.

There are two main categories of short-term loans:

Typically, you can borrow up to £1000 at high interest rates of up to 1314% APR for up to four weeks.

Usually, you can borrow up to £2,000 for up to six months at high interest rates of 1,314% APR. Here is an illustration of a particular lender’s fees:

  • A loan of £200 with a repayment period of four months. £332.00 is to be repaid in total in 4 installments of £83.00. 292% annual interest (fixed). Representative APR of 1,306%.
  • If you can demonstrate that you are affordable enough and meet all other requirements of the lenderloans can be reasonably simple and quick to obtain.

Do not decide on any emergency loan out of desperation

People may make hasty decisions that could have adverse long-term effects while under increasing cost pressure, such as taking out an expensive loan.

You shouldn’t rush and choose the first alternative that comes up just because you need the money, it could result in a terrible choice.