When Short-Term Loans are a Good Idea and When to Avoid

Oct. 26, 2011 - PRLog -- Short-term loans, or ‘payday’ loans as they are often referred to, are frequently given a bad name; but when used in the right circumstances, they can be very useful. However, there are also times in which they should be avoided and consumers should take them seriously to avoid getting into further debt.

With ‘payday’ loans often slated in the media, the UK’s most affordable short-term loans provider has released advice surrounding when a good time to take one out is and when they are best avoided.

www.InstantLoansDirect.com launched into the market earlier this year, with an aim to change the face of the instant loans sector by being a more ethical lender; offering more reasonable rates. With some lenders having an APR in excess of 4000%, InstantLoansDirect offers short-term loans at a rate of 448.3%; equating to a payback of 50p per day for every £100 borrowed.

Despite news from the Citizens Advice Bureau that debt from ‘payday’ loans has quadrupled in the last two years, short-term loans can offer fast help in times of financial difficulty and, when used effectively and responsibly, can be a solution to managing outgoings.

InstantLoansDirect recognises that short-term loans aren’t necessarily needed for everybody and stresses that they should be used carefully. The site has stringent employment checks to ensure that anyone applying is in a position to pay back their loan and also has no other payday loans outstanding; therefore applicants must meet certain criteria.

According to InstantLoansDirect.com, short-term loans can be effective in the following example situations;

•   Car problems – Car trouble in the middle of the month can spell trouble for anyone’s bank balance. If unforeseen, some cash is often needed to pay for repairs until payday arrives.
•   Unexpected bills – Forgetting that a quarterly bill is due one month or that the household TV licence is up for renewal can cause problems financially and short-term loans can offer the funds needed to cover the cost.
•   Household emergencies – Plumbing, electric or other household emergencies often mean the need to get hold of cash fast arises, which is where short-term loans can be useful.
•   Travel emergencies – If something crops up that requires travelling, such as a family emergency, short-term loans can be a solution; offering the money to cover fuel, train or airline costs to get from A to B, just until your own money comes in.

Times when short-term loans may be best avoided include the following;

•   Social events – A party or night out on the town should not be treated as a cash emergency and taking out a short term loan under these circumstances isn’t ideal.
•   New clothes – Even if it’s a brilliant bargain, question whether or not it can wait. No new clothing purchase is an absolute emergency and if you have to borrow to afford it, chances are you shouldn’t be buying it in the first place.
•   Paying off other debts – Going further into debt by using one method of borrowing to pay off something else isn’t the best idea. Get one debt under control before borrowing again.
•   Gifts – Borrowing cash to buy items for others is a sign that perhaps presents aren’t going to be do-able for you in your current financial situation. If a card can suffice, go with that instead.

Giles Coutts, founder of InstantLoansDirect.com, commented:

“Although we are a short-term loans provider, we’re keen to make sure people realise when are the best times to take advantage of our services and when might be best to avoid borrowing altogether.

“The key thing to do when considering taking out a short-term loan is ask yourself a) is it an emergency and b) are you in a position where you’ll be able to pay it back by the deadline. If the answer is ‘yes’ to both, then instant loans can be a very good solution in a number of different circumstances.

“As we offer a considerably low interest rate in comparison to mainstream lenders, that’s particularly true when borrowing from InstantLoansDirect.com.”

LINK http://www.InstantLoansDirect.com

ENDS

For more information, contact Shannon Haigh of 10 Yetis PR Agency on 01452 348211 or email shannon@10yetis.co.uk  

Editor’s Notes

Instant Loans Direct is a ground-breaking online loans service based in the West Midlands, that aims to provide customers with fast access to short-term personal loans with brilliantly low interest rates; when compared to other market-leaders and lenders, Instant Loans Direct has one of the lowest interest rates going, almost 10 times lower than Wonga.

Launched in July 2011 and founded by Giles Coutts, Instant Loans Direct has an exclusive partnership with a large PLC, H&T pawnbrokers, in order to provide consumers with payday loans that have such a low interest rate.

Customers borrowing through Instant Loans direct pay 50p interest per day for every £100 they borrow. The maximum amount available via Instant Loans Direct is £300 and the lending period is a minimum of 4 days and a maximum of 30 days. Rates can be compared to other lenders here.