It is extremely necessary to manage your finances. Consider the potential magnitudes of your management decisions and how they can impact your finances. Every decision that you make will either – build or break your whole finance management system. Proper financial planning will help you determine your goals, which will eventually result in a secured future.
The issue of credit card debt is soaring as millions of Brits struggle to pay off their debts. Fresh numbers demonstrate that households owe a total of £72.5bn on credit cards. Each of the households in the UK now has an average of £2,688 unpaid on cards. Unintentionally, we buy a lot on credit cards and when the bills start showing up on our doormats, we frantically look for ways to repay them. Rather than putting every expense on the plastic, try considering other alternatives that may help you manage the expenses. Personal Loans in London and every other major city across the UK are gaining popularity due to the flexibility they offer.
Major takeaways of this blog:
- The functionality of short-term loans
- How it is an alternative to credit cards?
- Tips to tackle unmanageable piles of debt
The functionality of Short-term Loans
A short-term loan is an unsecured personal loan that is availed by the borrower to support any temporary and interim need. The process involves a capital amount and interest that must normally be repaid within one year from the receipt of the loan. The contract of this loan doesn’t require any collateral to be pledged. Also, to avail this loan, borrowers do not need to find a guarantor.
An individual looking to avail a loan has to find a lender who fits their eligibility criteria and then apply for the loan – stating the fundamental requirements, such as how much they need to borrow and the time frame needed for the repayment. The other necessary details that may be required are date of birth, email id, functional bank account number, current and past employment information, and residential details. The details will be verified by the lender and also, the lender will assess your loan eligibility. If they approve your loan application, the money will be disbursed by the lender.
Once you get the loan, you may use it for any purpose that you want to – except for illegal purposes. The repayment structure of these loans allows a borrower to repay in fixed monthly instalments that provides them with a breathable space to manage their finances easily.
How It Is an Alternative to Credit Cards?
Tracking the expenditures made by using a credit card is a bit lengthy, however, tracking your cash expenditures is comparatively easier. The physical transaction of money also helps you make a mental note of where you are spending it.
Also, when you use a credit card, the repayment has to be paid in a lump sum on your next payment due date to avoid any penalties. However, you have the option to borrow a Short-term Loan for 12 month – that means you may spread the cost of repayment over a year.
Such credit products allow you to use cash, unlike credit cards. However, there is a similarity in both the credit products. If you fail to repay the amount for a credit card, or for your short-term loan – your credit score is at stake. A ruined credit profile is considered as a potential risk by the lenders and credit card companies. So, if you default on the repayments, it may create a spot on your report. And always remember, that credit takes years to be built.
Tips to Tackle Unmanageable Piles of Debt
Debt is a part of our everyday lives – rather than cribbing about it, start optimizing it. The debate about “good debt” and “bad debt” will continue, however, what you should do is – take up the charge and be responsible to find a concrete resolution. These three tips (3 P’s) may help you tackle your debts smartly:
- Pay your bills on time
Stop missing your deadlines. The sooner you act, the easier it will be for yob u. Late repayments make paying off your debt harder because, with each late payment, a late fee is added to the pile of debt. Set up a reminder or automate your payments to save yourself some trouble.
- Prioritise your debts
If you’ve multiple debts, start categorising them into – a high, medium and low priority. Give more attention to the higher one and least to the lower ones. In this way, you will be able to pay off the important ones quickly.
- Planning and Budgeting
This is instrumental for your financial future. Making a budget helps you to determine the actual amount of money you need in a month for regular expenses. In addition to that, it also helps you maintain your emergency fund.
Whenever you feel like using a helping hand to manage your financial troubles, weigh both the options – credit card and short-term loan. A short-term loan can prove to be helpful in various ways while with a credit card there is some restriction to the usage – where and how to use it. Cash is accepted everywhere around the globe, but with a credit card – it depends. Also, with cards, there is always a chance of overspending. Refrain from going into a debt trap by wisely choosing a credit product that suits your current financial conditions.
Oyster Loan offers a wide range of short-term personal loans in the UK, to apply, click here.