Perhaps the most problematic effect of the global financial crisis was for most people the decline in the availability of credit. The increasing difficulty in gaining loans from high street banks caused financial difficulties for many would be borrowers. It can be difficult to avoid a situation where a household has to make a major purchase, but simply does not have sufficient funds to do so. If a high street bank is unable to provide the service, borrowers can be left wishing they could rub a magic lamp and summon a mythical Cash Genie.
A cash genie doesn’t have to be something from a Walt Disney film – in reality, there are companies out there who will provide short term loans almost immediately. That said, it is vital to always think carefully and strategically when applying for a cash advance. Primarily, one needs to be sure that a loan is repayable. The lender will probably give you an indication of the extent of your monthly repayments, and it is advisable to think of a scheme of how these payments will fit into your current expenditures. If there doesn’t seem to be a feasible way of factoring in these outgoings, it is probably worth foregoing the loan, at least in the short term.
The other vital thing to be aware of is the interest rates you are going to be charged. Anybody who borrows money will be charged for the service, and the fee depends on the company who is lending the money. It is important to be aware of arrangement fees and early repayment penalties – ensure you have the maximum information about the loan you are taking out before you decide which loan to go for.
Some lenders may try to sell you loan protection insurance. As another financial product offered by lending bodies, this can be a useful investment, but equally you must think carefully about whether you can justify the extra cost that this will add to your loan. A respectable lender should be able to give you personal advice on whether this is the best choice for you.
For most cash-strapped households, a magical Cash Genie is not going to appear and provide the funds to secure the purchase of a new bathroom. But if you can do enough research and information to be able to find a loan that suits you perfectly, you should find yourself perfectly able to meet your needs without resorting to Aladdin’s lamp.
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