Do’s and Don’ts of Short Term Loans

Published on June 25th, 2018

The world of short term lending offers many opportunities for people who are looking for help when their bank account runs low or find themselves in a situation of financial distress. However, before you go looking for short term loans online, there are a few things you should know.

Don’t: Borrow More Than You Absolutely Need

While finding short term loans online is a great way to get yourself out of a bind, they should be used responsibly. Short term loans are not the answer for long-term financial health. If you decide to take out a loan, try to only borrow the amount you need, even if you qualify for more. You don’t want to spend extra money just because it’s available to you.

Do: Think About Your Pay Off Timeline

Consider whether or not you’ll be able to pay back your loan on your next payday. If you can, you’re in good shape to take one out. If not, consider how long it would take you to pay it off and how that will affect what you owe in interest. Your goal should be to repay your outstanding loan as soon as possible.

Don’t: Use One Loan to Pay Off Another Loan

This is called loan cycling, and it’s a dangerous habit to pick up. By routinely using new loans to pay off existing loans, high interest rates can easily trap borrowers in a never-ending cycle.