When you are considering taking out a loan it is always sensible to think about whether you will be able to repay the loan. It is wise to find out more about how the repayment works and then think about your situation to see whether you will be able to manage it.
How are Short-term Loans Repaid?
Short-term loans do differ a bit in the way they have to be repaid. Some of them will need the repayment to be made in a lump sum on the day that you are paid. This means that you will need to repay everything that you have borrowed plus the interest and fees all in one go. This is set up to leave you bank account on the day that you are paid. Others will have payment in instalments over a number of months which will still leave your bank account on the day that you are paid. If you miss the payment you will get charged extra money.
Will it be Easy for me to do?
Obviously, it will be important for you to make these repayments so that you can avoid those extra charges that you might otherwise face. There is no way to guarantee that you will be able to make the repayments but you will be wise to check and see whether there is a large change that you will be able to repay. There are various things that you can do which will help you to assess this.
- Firstly, find out how much the loan repayments will be. Then you will be able to start to work out if you can afford them. If it is not obvious from the lenders website then get in touch with them to find out as you will need the exact details in order to calculate if it is something that you can afford.
- Once you have the figure you will be able to take a look at your previous bank statements to see whether you normally have this much money left at the end of each month. If you do, the you know that you will be able to afford that repayment on top of a normal spend.
- Make sure that the month or months that you will be making repayments will be typical ones with regards to earnings and spending. If you have any extra things to buy or think that you might earn less then this could mean that the loan will be harder to afford.
- If you feel you will not be able to afford it then have a think about whether you will be able to make changes to you spending that could help. You might be able to compare the prices on the things that you are buying so that you will be able to buy cheaper ones and save money that way. It will depend on where you shop, how much you buy and whether you already compare prices as to whether this will save you a lot of money. However, you might find that you will be able to reduce the amount of things that you buy and this will help you to spend less.
- If reducing spending is not an option or will not raise enough money, then you may need to look for ways to earn more money instead. This could include selling things that you own and do not need, doing more hours in your job, finding some temp work, doing some freelancing or some online work. There are a lot of possible options and it is worth making sure that you explore all of them.
So, if you think that it will be easy for you to repay the loans then this is great and you should consider taking it out but if you feel that it will not be easy for you to repay it, then you will be more at risk of missing payments and it may not be such a good idea to take out the loan.