Are Short Term Loans Good for First Time Borrowers?

There are not many borrowing options for first time borrowers. There are a number of reasons for this but there are some things that you can try and it can be worth considering whether they will work for you.

First-time borrowing

Lenders will like to check your credit record before lending you money. This is because they will want to check whether they think that they will be able to trust you to repay the loan. They will look for indication of this by checking your past borrowing record. Normally they will be looking to see that you have had a loan and that you were able to make the repayments. However, if you have had a contract and kept up with payments on that or make regular bill payments, this could be enough for them to be happy to lend to you. However, it will very much depend on the lender as some will be a lot fussier about their requirements and might want to see lots of evidence of repaying before lending. It may also be the case that you have not got any contracts or made regular bill repayments so there is nothing to show that you are capable of making regular payments. It might therefore be the case that you will struggle to borrow money for the first time from a traditional lender. They will probably want to see evidence that you can be trusted before they will lend to you. However, it might be that short-term lenders might be able to help you out with this.

Short-term loans

Short-term lenders such as Boutell Loans UK tend to lend to those that have a poor credit record as well as those that have a good one. This means that if you are likely to be turned down by traditional lenders, then you might still be able to get a loan from them. This means that you do have some borrowing options. These types of loans tend to be used much when you need money in an emergency, but this can depend on the specific short-term loan that you try. The payday loans tends to only be for a few hundred pounds, but if you pick a guarantor loan then you can borrow thousands. There are different types which will provide borrowers with different amounts of money as well as different repayment schedules.  You will need to look at the different loan types in order to see which one will be the most suitable for your needs. Choose carefully and spend time doing this as it could make a big difference to your loan experience.

Credit Record

You will need to be careful when borrowing money though. If you want your credit record to improve then you need it to look good. This means that any loan that you do take out, you need to be sure that you will be able to repay. As long as you repay it on time, you will have the best chance of it improving your credit record. Potential lenders could see this as a positive thing and be more likely to lend to you in the future. However, all lenders have different criteria that they use to judge potential borrowers on. Some might be impressed by the repayment of a loan but others may be worried that you have used a short-term loan. They might feel that this is an indication that you could not use traditional lenders and see it as a reason not to lend to you. It can be really difficult to know exactly what the best thing is to do in order to improve your credit record. Keeping up with all repayments, bill payments and contracted payments will be an extremely useful thing to do so always make sure that you do this. If you do not have your name on any of these things, then try to be. Perhaps your partner or a person you share a home with has their name on it. Try to get things put into joint names or changed to your name, as long as you are confident you can pay it and this will go in your favour.

So, if you need money and are a first-time borrower then it could be the case that only short-term loans will be an option for you. They can be a useful way to get a loan and there is a possibility that they may also improve your credit rating. However, it is wise to make sure that you are really confident that you will be able to repay the loan. If you do not repay it then your credit report will suffer and you will be worse off than you were before getting the loan. It is a big decision and you will need to take time to think it through carefully.

Will Payday Loans Help me to Make Ends Meet?

If we get into financial difficulties then we might look in all sorts of places to help us out. Making ends meet is something which it is a common problem and there are lots of possible solutions. It might be that you are looking to payday loans to help you. They could be helpful but this will very much depend on your situation and so you will need to give it some thought before taking one out.

Is it common that you struggle to make ends meet?

It is worth starting by thinking about whether you often struggle to make ends meet. If this is the case then taking out a loan may not be a good solution. This is because the problem will occur again and again and you will have to keep taking out loans. This will cost you money as all loans have costs and will add to your problem. It means that you are likely to end up having to get lots and lots of loans and you may be in a situation where you cannot repay them.

If this is a rare occurrence then a loan could be a useful solution. It might help you to get a bit of extra money for a short amount of time to help you out of a sticky situation. This is what they are designed for and they could help you with paying bills, buying food or things like that. They can help you to manage to feed yourself and your family, replace broken things and pay bills.

Can you afford to repay the payday loan?

It is always important to ask yourself whether you can afford the repayments on any loan that you take out. You will need to start with finding out what the repayments will be. With a payday loan it is likely that you will just have one lump sum payment which will go out of your bank account on the day that you are paid. You should therefore have enough money available to pay it, but it is always wise to check how much money will be going in to the account and what other payments will be going out. Then you can work out if you will be able to afford it.

You will also need to think about whether you will be able to manage to pay for everything else that you need in the month once you have repaid the loan. You will have other things to pay for such as rent or mortgage, bill payments, contracts, food, travel and things like this. You need to be sure that you will be able to afford all of this despite repaying the loan. You might be able to cut back or spend less for some items, but there will be some things that you will have to buy and you will have no choice about how much you will pay.

Do you have any Alternatives?

It is also wise to check whether there are any alternative solutions to your problem. If you are struggling to make ends meet then you might be wise to take a look at the cause of the problem. It might be because you are spending too much money or earning too little. It can be easy to spend lots of money on things that we do not really need and it is worth considering whether you do this. We may also be paying more than necessary for the items that we do buy. It can be useful to think about everything that you are buying and ask yourself two questions. Firstly, ask whether it is something that you really need and then ask whether you are paying more than necessary. With the cost you will need to consider good value for money. You may not be prepared to buy cheaper versions and you may think that they will not be as nice.

You might also want to look at whether you can increase what you are earning. This could mean working more hours at what you do already, but you may also want to think about taking on an extra job. You might be able to earn some money doing freelance work or online work as well. It is good to take a look at the possible opportunities to see what will fit in the best with your lifestyle. The idea of working more can feel unattractive. We might feel that we work hard enough or perhaps that we will not cope with the stress of the extra work. However, it is a good idea to look at what is available as you may find that you can earn money in a more relaxing way. It could be by simple online tasks by answering questionnaires or by selling things that you already make for your hobby. It is a good idea to spend a bit of time considering the possibilities.