The growth of small businesses has led to significant increase in personal loans. Besides the ease of getting a personal loan over a business loan, there are several other reasons why personal loans make more sense.
So to make it simpler, let us understand what personal debt is. It means a debt owed by you for any purpose that may or may not be related to business. You can be ‘personally’ entitled to it, or you can be entitled to it with another party or parties. Collateral are optional in personal debt.
People engage in personal debts for various reasons, sometimes by not indulging in personal finance in its real sense, which then leads to bad credit. Bad credits, in turn, make it difficult for one to get a loan at a reasonable rate. In the UK, the household debt has increased to about 7% in the past five years; along with a significant increase in student debt and consumer credit. Expense management and obtaining higher disposable income is a challenge yet to be won.
WHAT CAN BE DONE? Simple. Effective Expense management and Payday loans.
Expense management: This is the easiest way to avoid any kind of debt, and also the most challenging part of personal finance. It involves immense self-control and self-awareness. Personal finance helps you budget yourself well and avoid any unnecessary expense. Thanks to the growth in technology, we now have a choice of expense management tools to use. Expense management software has proven to be a beneficial tool in conveniently providing a timely update and an expense report whenever required. It helps in tracking our expenses and budgeting further, as needed. One such software is Webexpenses – it is user-friendly, easy to understand and visually appealing.
Payday loans: A payday loan is an unsecured personal loan that comes with an average term of 14 days, rarely up to 30 days, and very high interest rates. It is the most convenient means of raising money for a quick fix. It saves you from bad credit and penalties levied on late payments.
Payday loan is also popular as short term loan to cover small or emergency expenses. It can be taken for personal needs or business purposes like startup that needs some amount of money or loans for a new project. Sometimes problem occurs in our life, if it’s the case of medical expense or it’s the case of a funding for our business. Borrower takes short term loans to meet the sudden and temporary capital needs.
Advantages of payday loans:
Accessibility – You can wave goodbye to all the hassle involved in getting an appointment with a loan officer, like in the traditional credit arrangements, and save your time by completing the loan application from your phone or desktop, from wherever you are.
Cash – Unlike credit cards, payday loans are given out in cash, so this rules out any limitation involved in the usage of the cash. You can pay your bills in cash, wherever required.
Purpose free – Payday loans can be taken for any purpose – to manage a week’s expense – unlike traditional loans that are issued for a specific purpose only – car loan, home loan, etc.
Fewer requirements – In comparison to a traditional loan, payday loans require minimal paperwork. A lot of the procedure can be accomplished digitally and does not require the physical presence of an individual. It involves few requirements – stable income, collateral is optional, checking account and registration as a permanent resident in your state.
Independent of bad credit – Payday loans are independent of bad credits; you have to prove that you have a stable income to repay the loan. Lenders check your credit score, but they base their decisions on your current and not your past financial status.
Speed – A payday loan can be approved almost instantly if not, they do not take as much time as conventional/traditional lenders. If you have provided the required information, the process can be completed within hours. A large number of lenders are struggling to make their service quicker than the other to remain competitive.
Shields your credit rating – Suppose you have a loan for about two years with four installments and you lose your source of income, or you are unable to pay one of your installments due to some reason, this can affect your credit score. The short repayment term in payday loan enables you to keep an excellent credit rating. It may appear as a shortcoming, but when looked from a broader perspective, it is a blessing.
Once you have the money you need, using it for the designated purpose alone, is very important. Prioritizing and tracking the expenses is the most crucial aspect of managing personal finance. Questioning yourself before making any expense is a must – this may seem a little extreme, but this questioning helps you make better decisions.
Several online courses help you understand personal finance and its management. Investing in such learning will help you do better, each day, and before you know it not only you will be managing your expenses but saving money too.
Managing finance by payday loans is a good alternative, but you will not need any loan if you learn to control your expenses.