There are times when your money just falls just a little bit short to pay for everything you need. This situation can be a little frustrating, or even downright worrying depending on what you currently cannot afford.
Fortunately, you have plenty of options to help you supplement your budget. If you need the money ASAP, a good candidate would be cash loan because the application process is much simpler and faster. Most of the time, all you need is one valid ID and an active bank or e-wallet account where the loan proceeds can be disbursed.
Of course, you need to be wise about borrowing money in order to make the most of it. Here’s how you can take advantage of cash loans in a smart and responsible way:
Borrow Money for Good Reasons
Most financial advisors will tell you that when you take out a loan, it should contribute to what is called your “good” debt. In the simplest terms, good debt is something that has the potential to generate profits for you over time. For example, if your online selling business needs a bit of a push, you can take out a cash loan for some extra funding.
This isn’t to say that you can’t take out a loan for leisurely purposes like travel. However, if you want to be wise about managing your money, try to exert every effort to only have good debt.
Borrow Only What You Need
Of course, there may be circumstances when you have to borrow money for reasons that may not be considered as “good.” For example, if you have an overdue payment for one of your utility bills at home, any further delay may end up with a disconnection. This is obviously not ideal, especially if you’re working from home. In this case, taking out a cash loan may be the best decision.
To make things more manageable, borrow only the exact amount you need for a specific purpose. If the utility bill is Php 4,000, don’t go over that amount even if the lender tells you that you can borrow more. This way, you won’t pay interest fees any more than necessary. You’ll also be more sure that you can pay off your loan on time.
Look for Loans With Fixed Rates
A variable, adjustable, or floating interest rate is something you want to avoid in a cash loan. This type of interest rate changes or fluctuates as time goes by, based on an index. The good thing about this is that if this index rate goes down, you’ll also pay lower interest. The downside, of course, is that the index rate can also go up and so can the interest that you’ll pay later on.
It’s uncommon for cash loans to have variable interest rates, but it’s still best to be sure. Read the fine print (more on this in the next section) to know what the interest rate is and how much you’ll be paying once the due date comes.
Read the Fine Print
When you sign up for social media sites, register an account for a video game, or something similar, do you read the end user license agreement or EULA before you click the “I Agree” button? Many of us are guilty of just skimming through the first few lines or perhaps not even bothering to look at the details of the EULA at all.
While this practice might be forgivable in some instances (just remember to be careful with your internet usage), it isn’t advisable for loans. You need to be more conscientious when it comes to borrowing money, whether it’s something as small as a cash loan or as big as a million-peso business loan. By being as thorough as possible, you can better understand your responsibilities as a borrower and all the things you’re entitled to.
For example, your loan contract may state that you can get cashback benefits if you pay your loan before the due date. This is an excellent way to save on money that you may be missing out on if you don’t read the fine print.
If you have any questions, don’t hesitate to talk to your loan officer. Some terminologies may be a little confusing, especially to first-time borrowers.
Borrow From One Lender Only
As much as possible, try to borrow money from one lender at a time only. This way, you only have to funnel your payments into one account and keep track of only one due date. When you have an easier time managing your loans, it’s also easier to build a good reputation with your lender and enjoy benefits for future transactions.
If you have to borrow from multiple sources, do your research and look for reputable establishments. Aside from banks, consider fintech companies that are duly registered. This way, you can be sure that your rights as a consumer will be protected.
Hopefully, with the help of these tips, you can take better control of your financial health and achieve your financial goals when you take out a cash loan.