You’re ready to take out your short term loans. But where do you start? In this post, we’ll walk you through what you need to know to get a loan in New Zealand.
Getting a little short on cash?
Whilst there are some things to consider, short terms loans can be a useful option to help you out in a tight spot.
Take a look at the steps below to find out how you could be on your way to a quick payday.
Getting Short Term Loans for the Right Reason
Whilst there are many benefits to getting short term loans, you should definitely consider the reasons why you would want to do so.
Make no mistake – there are people who will gladly take out a bank loan just to afford their next essential purchase!
Applying for a bank loan in order to some new clothes or shoes isn’t recommended.
It’s best to save borrowing money for a serious situation.
Sometimes you will have unexpected circumstances arise that can leave you short when you’re expected to pay rent or buy food, for example.
Even though these type of situations make more sense, it is still important to weigh up the pros and cons of taking out a loan.
Think about how soon you’ll get the money, how much you can borrow and what interest you’ll have pay.
There are several options for doing this.
Below we’ll compare borrowing money from a friend or family member, putting up your money against your possessions, or taking out a payday loan.
A Helping Hand
One thing you might want to consider when looking to taking out short term loans is asking a friend or family member.
People close to you may be willing to help you out when you’re in a tight spot.
It’s likely they have experience of how it feels to be in such a predicament.
If you decide to go this route, make sure you explain everything to them.
This includes how you got yourself into the situation, how much you need to borrow, and when you’ll be able to get the money back to them.
Make sure that you are honest when you decide to speak to them!
One of the advantages of borrowing from a member of your family is that they can often cut you deal when it comes to returning the money.
However, there can also be some grave consequences if you can’t pay them back.
Rather than just owing them, you can break their trust if you are unable to get the money back to them on time.
This can affect more than just their own pockets, and may put a strain on your relationship with them, too.
Putting Up Your Possessions
Why not try securing short term loans against some of the stuff you own?
Visiting a pawn shop can be a great way to get access to money quickly.
A pawn shop is also unique in that if you can’t repay the loan back in time, there is no consequence on your credit file.
The viability of taking out a pawn shop loan depends on whether or not you have any valuable possessions.
These can include a wide range of different items.
You can check to see what you can put up for money by visiting the websites of any pawn shops in your area.
Check whether they accept the types of items you have and arrange a valuation of them in person at their store.
However, there are a couple of things to remember when deciding to take your items to a pawn shop –
- The amount you get depends on the value of the item – and in most cases, the loan offer will be a lot lower than its worth
- If you do not pay your loan back within the time agreed, you will lose your item forever!
Taking Out a Payday Loan
One of the quickest types of short term loans are payday loans – their accessibility makes them popular with a wide range of people.
Payday Loans can either be applied for in person, or most commonly, requested online.
Before taking out a payday loan, it’s very important to do your research and shop around.
This is especially important, as there are a number of payday lenders than can take advantage of new customers.
Luckily, due to a revision of the Credit Contracts and Consumer Finance Act, payday lenders have to be more responsible.
Qualification and Terms
In order to take out a payday loan, you need to be able to meet certain requirements.
Different lenders will have different needs.
Generally, these will include things such as your employment status, age, income and reason for borrowing.
It’s important to be honest when giving lenders your details for an application.
Incorrect information will more than likely lead to your application being denied.
Your credit rating will also have a bearing on whether your application is successful or not.
Make sure to weigh up your incomings and outgoings so that you have an accurate idea of when you’ll be able to pay the loan back.
Some lenders will help you to work this out onsite.
You’ll also have to take into consideration the amount of interest you will have to pay.
This can vary greatly depending on your lender. Some payday loan companies will charge a very high amount of APR.
Here at Pretty Penny, we charge 1% interest per day.
Depending on the terms set out by your lender, you might also have certain restrictions on what you are allowed to spend your money on.
Paying your loan back on time is of utmost importance.
However, before taking out a loan, you should check to see what the penalties are for not doing so.
It also helps keep you on your lender’s good side if you can let them know if you feel you may be unable to make payments in advance.
Conversely, check to see whether there are any charges for paying back your loan early.
Some companies will charge you early repayment fees, whilst others will welcome you getting the money back to them early.
So what you do think you’ll do when it comes to borrowing a short term loan?
If you’d like to know more about short term loans, don’t hesitate to get in touch.