3 Months Loan Benefits
Warning: Late repayment can cause you serious money problems
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Representative Example: Representative 1286.98% APR on a loan of £300.00 with 5 monthly repayments of £101.03 Total amount repayable £505.13 Annual interest rate (fixed) 290%
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Author: Internal Marketing Department
In a previous discussion we analyzed who should take out a 3 months loan and who should not. The fact of the matter is that people who are absolutely certain that their financial situation permits them to make full repayment of the 3 months loan that they take out shouldn't encounter any difficulty. However, borrowers who fail to plan and educate themselves may end up making the uninformed decision of taking out a loan on a duration that isn't affordable given their specific financial circumstances.
The benefits of a 3 months loan comes in different forms, some not necessarily monetary:
· Short enough to prevent the borrower from incurring too much interest as compared to the same interest rate over a longer period.
· Duration is enough for people who are confident in repaying the loan without applying too much financial strain on them
· Able to facilitate immediate short term financial needs such as emergencies or bridging cash flow gaps
· Loan can be paid back quickly without risking any other unforseen circumstances from arising and causing the borrower to be late on payment
However, a 3 months loan can cause borrowers to fall into a financial trap if they aren't sufficiently prepared for it, they:
· May potentially cripple the borrower's finances, causing him or her to take out another short term loan
· May eventually lead to a pattern of borrowing short term loans to facilitate the previous short term loan
· Can add far too much financial pressure on lower income groups
· Are an expensive form of borrowing if other options are available.
A 3 months loan is capable of fulfilling the needs for many emergencies. To make the best of a 3 months loan, your financial needs and circumstances have to be structured around the loan. This is due to the repayment commitment that will be brought upon you as a borrower, which has been mentioned before.
Once again, this reiterates the importance of ensuring that your financial situation allows you the confidence to repay a 3 months loan. This requires a certain amount of foresight as well, so that you can accurately determine whether similar emergencies may occur in the future which will prevent you from making the schedule instalment payments. It's impossible to entirely mitigate the risk of emergencies, but it's always ideal to keep the possibility of it happening as low as possible.