When you need a little extra money and your paycheck just isn’t cutting it, you may be considering applying for an online loan. What’s great about this modern age of banking is that you can apply for a loan quickly and easy from the comfort of your own home, rather than needing to haul a load of paperwork to the bank for a lengthy interview. You can also compare online loans quickly and easily, and use the wealth of information online to make an informed decision.
When considering a loan, you may wonder what other people do with their loans. Here’s a quick look at the top 3 reasons for getting an online loan:
1. Consolidating debt
By consolidating your existing debt, for example outstanding loans at a higher interest rate or outstanding overdrafts from multiple credit cards, you may be able to manage it more easily, with one monthly payment rather than several. However, you should pay careful attention to the interest rates involved and the repayment period. Short term loans may not be appropriate for consolidating debt, the better course of action may be to contact an effective debt management service who can help you to restructure your debt into something you can manage and have control over.
2. Unexpected bills
It is not uncommon to find yourself landed with a big car bill, vet bill or medical expense. You may just not have the savings to cover yourself in this situation, which is why unexpected bills is a top reason people apply for short term loans. You may have exhausted all other avenues, like asking friends or family for help.
3. To buy a car
Another reason people apply for online loans is to get some money for a new car. Nowadays, with everyone driving, it may be imperative to have a car just to get into work. In this case, rather than getting a car on finance (which can have large interest rates) you might instead get a short term loan to cover your new car expense.
Of course, it is important to consider carefully all your options before applying for instant online loans. It is never a good idea to get into unnecessary debt, and as online loans provider Wonga says on their blog, a person can choose to have ‘good debt’ or ‘bad debt.’
Good debt might count as debt to cover school fees, or a car – something you really need and a reason that will pay off in the future. However, bad debt might count as money for a holiday – a reason that isn’t deemed totally vital, and something which could end you up in a lot of debt for no good reason.
It can appear tempting of course with the seeming ease of online loan applications to apply for a loan for any number of reasons, but online loan companies do conduct background checks on your credit file and will always ensure suitability of you, the applicant, before giving out money.