If you are having cash flow problems, you may have to get creative to relieve some financial stress and get yourself more money.
Getting a personal finance loan will help get you out of emergency situations, and if you are able to stick to the loan repayments, you should be on your way to financial stability.
Below we are going to look at your options for personal loans, and how they can be used to alleviate financial stress.
What are Financial Loans?
The term financial loan covers a wide variety of loans, and are often used as an emergency fund to cover unexpected expenses. These loans come with interest rates, are mostly issued once-off, and must be repaid within an agreed period.
Financial loan options include:
- personal loan
- business loan
- car loan
- student loan
- quick loan
- payday loan
That said, you may want to consider the pros and cons of payday loans before getting a quick loan as they tend to carry very high interest rates. The national debt helpline is a great source of information if you find yourself in an uncertain financial future and need advice on loans and getting rid of debt.
You can use your loan for almost anything
Personal loans can offer you a measure of financial security when you are in a financial bind. These loans can be used for almost anything, but are mostly used for the following:
- Repaying other debts, like student loan debt
- Renovating a house
- Wedding
- Trips and holidays
- Buy electronics
- Buy furniture
- Repaying credit card debt
Where can I get a loan?
There are several financial resources available that will help you apply for a loan, and may also offer you the services of a free financial counsellor if you have questions regarding your cash flow forecast.
Below are some institutions that will offer you a loan and may also offer advice on managing money better.
- Banks: Banks tend to offer fair interest rates and good financial support. If you have a good credit score, then lending from a bank is a great option.
- Credit union: A credit union offers similar services to a bank, however they offer a lower interest rate and service fees, especially if you have a good credit score.
- P2P Lenders: Peer-to-peer lenders act as a middle man between lenders and those needing a loan. This type of loan is quite affordable, and the peer-to-peer lender may provide financial assistance.
- Alternative lenders: If you have a bad credit score, banks may not be willing to offer you a good loan. Alternative lenders can quickly get money into your bank account, but they may have higher interest rates.
The lender you choose will depend on how much cash you need, as well as what the money is needed for and how quickly you can repay the loan and interest.
Can I get a loan from a broker?
A financial broker will not offer you a loan, however they do work with lenders and can help you find a loan that will let you pay bills and meet your needs.
If you work through a broker, they will send out your application to a panel of lenders and the lenders will make an offer.
Brokers ask for a commission, so it is best to work directly with the lenders.
Secured and unsecured loans
When it comes to personal loans, they are either secured or unsecured.
- Unsecured loans do not have to be secured against another asset. These loans offer less money and higher interest as they are a risk to the lender. Unsecured loans are mostly used when you are spending money one-off, like holidays and for weddings.
- Secured loans are larger loans and can be used by people with a lower credit score. The loans are offered against an asset. Secured loans can be used to cover your monthly rent or to purchase a car.
Different interest rate options
Interest rates can be fixed or variable.
- Fixed interest rates do not change over the course of the repayment term. This type of interest can help with saving money as you can budget your repayments ahead of time.
- Variable interest rates can increase or decrease over your repayment period. Although this type of loan generally have a lower interest rate, the fluctuations in that interest rate can make it hard to budget your repayments, and you will have to be more careful when you spend money.
Ask yourself the following questions when considering a financial loan
- How much money does my financial situation require?
- Can I get an unsecured loan?
- What interest rate do I require, fixed or variable?
- Which lender will offer me the best loan to meet my needs?
- Will I be able to repay my loan early?
- Are there any additional fees?
- What are my financial goals?
Final Thoughts
Your mental health can be seriously affected if you are struggling to save money or cover monthly expenses.
Applying for and securing a financial loan can offer you a quick cash injection that will help you out in a tough situation.
