Short-term loans have bailed many people out of many unexpected situations. While these loans can be the perfect option when emergencies arise, they can send you into a spiral of debt when taken for the wrong reason. Here are five situations that are never cause for the taking of a short-term loan:
1.Paying Off Debt
Keep in mind that there is a vast difference in using a short-term loan to keep the lights burning in your flat, and taking one to pay off a credit card. The interest rates and fees on short-term loans are often higher than those on credit cards and other debt, making it senseless to use them to pay these bills. Taking on debt to pay debt is never a good idea. If you have found yourself deep in debt, there are other options for you.
2.A Trip to the Shops
If you've only got one top that fits, you better wear that one top until it falls off. Taking a short-term loan out for a trip to the shops should never be considered. If you don't have the money to purchase those brilliant shoes, you certainly won't have the money to pay back your loan. A far better option would be to put £5 or £15 pounds away each week until you've saved enough money to pay for your purchase. Alternatively, look for a knock-off of the outfit you're dying to have; they're always more affordable.
3.Gifts
If you don't have money to buy someone a gift, buy a card. You can also give the gift of your time; it's free. Never take out a short-term loan with the goal of impressing someone with an amazing pressie. Most of the people who are close to you have a glimpse into your financial situation; the only person expecting you to pay hundreds of pounds for a gift is you. If you feel as though you can't show up to a celebration without an expensive gift in tow, make your apologies and stay home.
4.Nights Out
Whether it's a hen party or a dinner at the weekend, short-term loans aren't meant to pay for what you wouldn't be able to afford otherwise. If you don't have the money to eat at a Michelin-starred establishment, don't borrow the money to make it happen. Instead of heading out on the town with your mates, invite them to your flat for a night of dinner and drinks. Ask all of your guests to bring a dish or a favorite bottle of wine. You'll have just as good a time as you would if you went out on the high street.
5.Lending Money
When friends and family need money, it's natural to want to help. Never take out a short-term loan and hand the money over to someone else. As much as you love your friends and family, you can't be guaranteed that they will be able to pay back the debt. If you don't have cash on hand to lend someone, try to help out in other ways. You may help your friend search for a new job, offer to watch your sister's child for the day so she can take care of personal things, or act as someone's transport while his or her car is waiting to be repaired. Don't forget that money isn't the only means you have of helping someone.
If you are considering taking out a short-term loan for anything other than an emergency, think again. There are wants and there are needs; if you don't have the money for the things that you want, you can go without.
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