There will be times when your finances are not as robust as you would like them to be. Even if you spend a lot of time planning for financial mishaps or surprises, there will be times when something comes out of the blue to throw you off track. This is why you need to be flexible enough to deal with these surprises.
The first step to take in dealing with a financial issue is to work out how much money you need. This is one of the most important steps because you should only ever apply for a loan for the amount of money that you actually need. A lot of people cause themselves significant financial difficulty due to taking out too much money at a time. It may seem like a good idea to take out more cash than what you need but in the long run, this will only cause you problems.
You need to review your budget
There is also a lot to be said for people taking the time to review your budget. If you look at the money left in your bank account it may seem as though you don’t have enough money to pay off your bills and deal with other issues, but are you dealing with your money in the most effective manner? It may be that you can allocate your money in a more effective manner, and this can alleviate the need for external financial funding.
Before you rush into organising a loan or looking for help, always make sure you look at your own situation and determine what you can do to make changes.
One step that is available for many people but will be avoided by a lot of people is asking family or friends for support. It is easy to see why people would prefer not to take this option, including:
- You may not want friends and family members to know about your finances or personal matters
- You may fear a backlash or criticism from friends or family members
- You may know the financial situation of your close circle and help won’t be available
- You fear falling out with loved ones due to financial difficulties
- You fear not paying the money back to people who support you
These are all key reasons why people will decide against asking friends or family members for support. You need to consider your own circumstances and if you can receive support from those around you, you should look to take it.
Traditional lenders may not help you in a hurry
If you are not looking to go down the route of asking family or friends, you may want to think about whether traditional lenders are in a position to support you. If you need money at short notice, you’ll find that these lenders are not a good option. This is because traditional lenders like banks and building societies will ask you to fill in a lengthy application form.
There is also the fact that traditional lenders will take a long time to get back to you about your application. If you need money in a hurry, this isn’t an option that is best for you.
There is also the fact that your credit score may rule you out of a loan from a traditional lender. If your credit score is poor, these lenders are unlikely to provide you with funding and if they do provide you with funding, it is likely to be at a high cost.
One option that is available for people with poor credit but which also comes with a high cost is a payday loan. You should look to avoid payday loans as best as you can. This is because these loans need to be paid back quickly and the cost of doing so can be harmful.
You may find that a guarantor loan is the best option for your needs. This is because a guarantor loan relies on the credit score of someone willing to vouch for you. This provides you with a more affordable option, which may be all the support you need to turn your life around.
You can find the finance option that is right for you but be prepared to spend the time to find the right option for your needs.
Andrew Reilly is a freelance writer with a focus on news stories and consumer interest articles. He has been writing professionally for 9 years but has been writing for as long as he can care to remember. When Andrew isn’t sat behind a laptop or researching a story, he will be found watching a gig or a game of football.