Quick loans have started gaining popularity. After a massive drop in the early 2000s due to dodgy fees and charges, the FCA has stepped in to regulate this industry. It is now genuine and less likely to cripple you. In fact, a quick loan is similar to a classic loan. There are a few differences though.
First, you may not be able to get £5,000. You will need a regular loan for that and it may take a few days or weeks to get it. Second, once you get accepted for a quick loan, you will be able to receive the money within an hour or two – straight to your bank account, no applications, letters or face to face meetings.
Now, there are a few rules you need to keep in mind when opting for quick loans. One of them is pretty simple – only apply for what you need.
Getting More Money Than You Need
Assuming that your financial situation is stable and you are employed, it might be tempting to apply for more than what you actually need. It is a difficult month, so you might want some extra. You never know when you might need it. Perhaps you want more than just basic groceries when you go shopping. Maybe you want to go out a few times too.
Generally speaking, a small loan is more likely to be accepted than a large loan. Therefore, asking for more than you need might tip you from approval to rejection.
Keeping the Interest Low
On the other hand, a higher loan will most likely bring in a bigger interest rate. After all, the interest rate is directly proportional with the loan. In other words, applying for the smallest possible loan will reduce the amount of money you have to apply.
Not only do you increase your chance to be approved, but you will also get into a better financial position throughout the following months.
Keeping Your Expenses Low
Most people consider getting a quick loan straight away. They figure out how much money they need and they go for it. In reality, they need less than that. The loan could be way smaller if they actually worked on reducing their expenses a little.
There are more ways to do it. For example, you can buy cheaper food. You can forget about that fancy food for a month or two. You can also fill your tank halfway up, rather than all the way to the top. If you go out clubbing three times a week, do it once instead. Cut on the fancy items and cook for a few weeks – leave the takeaways.
It may sound like small things, but all these expenses will add up. You may feel like you need £500 to overcome this bad month. In reality, you will probably do with £300 as well. In the long run, you will also pay less on interest fees. Therefore, it pays off sitting down and finding ways to remove your monthly expenditure – at least for a month or two.
As a short final conclusion, quick loans are attractive. There are more reasons behind their popularity and accessibility is one of them. But then, why would you pay more in interest rates when you could pay less? Why would you struggle to repay over four months when you could do it in two months?
It takes a bit of homework and planning to figure out how to reduce your expenses, but it can be done. The best part about it is you will manage to overcome the problem much faster.