To prevent this process from repeating and miring you in an infinite cycle of debt, the FCA has limited the number of rollovers to two. They also require lenders to provide you with an information sheet before you roll over the first time, to ensure you fully understand the process, and that you have access to advise on other ways to manage your debt.
The fast cash granted by a short-term loan is alluring to many, so much so that it can blind them to the dangers payday loans in Avon Lake OH of recklessly entering into an HCSTC agreement. The high costs and short repayment period of these loans mean they should not be entered into lightly, nor frequently if you have any other choice.
So, when is it appropriate to take out a short-term loan? At Now Loan, we advise you to only consider this option in emergencies, such as:
• Private Medical Expenses. If you or a loved one requires urgent medical attention, the last thing you should have to worry about is how to pay for it. When weighed against your health, interest rates become trivial.
• Loss of Income. It seems counterintuitive to suggest a loan when you’ve lost your employment. However, a sudden loss of income may leave you incapable of paying for rent, utilities, or even food. A short-term loan can cover the costs until you find a new source of income.
• Car Accident. Losing access to transportation can completely upend your life. You may have no way to work, or be unable to get your children to school, or meet any number of necessary obligations. A short-term loan may be your only way to quickly make repairs and get back on the road.
• Special Event. A once-in-a-lifetime concert. An opportunity to travel abroad with someone you love. These are not emergencies, but moments you are not willing to miss. If repaying the loan won’t place you into financial difficulty, then applying is not irresponsible.
Is a Short-Term Loan Right for You?
A short-term loan may not be the best choice for you, even if you are in the midst of a situation from the list above. Your need, however great, is not the only important element. Your ability, or inability, to meet the contract requirements deserves serious consideration.
While it is true that the FCA has significantly limited the impact of interest and penalties on short-term loans, those penalties can still be enough to make your bad situation worse. For instance, if you take out a loan while unemployed while knowing it is unlikely you will regain income before the loan is due, you will rack up fees and ruin your credit. This will make it harder for you to meet any of your obligations, leading to more defaults, and punitive action.
If you apply for your loan through Now Loan, you’ll be given the chance to compare short term loans from direct lenders. If no offer seems doable for you, you shouldn’t go through with the loan. Lenders can decide if you are qualified to receive a loan, but only you can decide if you are able to meet the terms.
Apply for an Instant Short-Term Loan With NowLoan
So, you’ve done your due diligence. You understand the benefits and challenges of a short-term loan, and you’ve decided that it’s the right choice for you. All that’s left is to apply, and with Now Loan, that’s the easiest step.
Our application is entirely online and can be completed in 3 short minutes by simply following the step by step instructions. A “soft” credit check will be performed at this point, but don’t worry. It won’t have any impact on your credit score or history. Afterwards, you will be given a list of loan options for which you have been pre-approved.