Know your options for short-term financial solutions

When the unexpected occurs, try investigating these options before you make a hasty decision.

10:53 03 April 2014

There are times when we all need a little bit of extra cash, or we know someone in that situation. It can be tempting to use credit card, or look for a payday loan. Many times people end up unable to manage the repayment plans due to the extreme interest rates charged by the companies. If you find yourself in a financial squeeze, take time to think about the situation before you dash off to the nearest payday lender. You want to avoid a downward financial spiral and there may be other short-term loans and other options to help you through your tough spot without creating huge amounts of debt.

• Interest rates—one of the things that most people realise is that many short-term lenders have higher interest rates. Even if you find yourself stuck with obtaining a payday loan, different lenders may offer different terms so check out the options and find out which ones are best for your financial situation.

 

• Banks—check with local banks that tend to offer more competitive rates as well as more manageable repayment options. It may take you a few more days to secure the funds than it would if you approached a payday lender, but it could save you hundreds.

 

• Logbook loans—these loans may offer you a better interest rate because you put up collateral to secure the loan. This can allow you the option of significantly better interest rates, but you should only use this option if you are able to meet the repayment terms without fail. You may risk losing your collateral, such as a vehicle, if you fail to repay according to the terms.

 

• Creative solutions—you may be able to tutor, sell used items, or even your own personal creations to help cover the financial gap.