If you are considering any loan, including a 6 month loan, it is wise to think about whether it is too much of a risk for you to take. There are lots of risks with all forms of lending, but there are also ways of minimising those risks. One of these ways to minimise the risks of a 6 month loan is to make sure that you are fully prepared for the loan, before you take it out.
Representative Example: £400 borrowed for 90 days. Total amount repayable is £561.92 in 3 monthly instalments of £187.31. Interest charged is £161.92, interest rate 161.9% (variable). Representative 305.9% APR. We are a broker not a lender. We don't charge fees. We don't sell your personal information.
There are a number of things that you should think about when you are considering a loan:
If you are worried about any of them, then you should either not take out the loan at all or come up with a plan on how you can improve the situation. This could mean that you will need to find ways of earning more money, spending less, being relaxed and continuing with this for six months. If you can do it, it will be a really useful exercise as it means that once the loan is paid off, you can continue to do it, but instead of repaying the loan, use the spare money to build up some savings. This will mean that there will be a much lower chance that you will need a loan in the future.
It is good to keep asking yourself whether you have the right approach to be able to cope with a loan. If you see what you have to do and feel despair or stress, then it is unlikely that you will be able to cope. However, if you feel like it will be a great challenge and feel determined to make it work then you are likely to be able to cope. You can change your approach though and therefore lower the risk of the loan.
What you will need to do is to be prepared to think through all of your finances in a methodical fashion. You will need to take a look at the things that you spend money on now and consider whether there are any things that you can do without or buy more cheaply. Comparing the prices of everything that you buy can be a really good start as that will allow you to find cheaper options and also be aware of how much you are spending on things. It can be really easy to just buy items and not really look closely at the prices of them and so you could end up saving a lot of money.
You may also need to look for more opportunities to earn more money as well. There are lots of ways that you can do this, if you have the time and it is just a matter of spending a bit of time looking. You will find many freelance work opportunities online as well as some smaller jobs, questionnaires that you can fill in, free lotteries and all sorts of other earning opportunities. They may not always pay out lots of money, but they will pay something which could make a big difference to how well you cope with the loan repayments.
A positive approach is also really important, It will enable you to be able to cope with the stress of the loan as well as seeing the tasks of earning more and being more frugal as a challenge and fun thing to do rather than a stressful activity. You will need a healthy approach as it will enable you to find the time and energy that you will need to be able to complete the challenge.
Therefore in order to access the risk of the loan you need to take a look at whether you feel you will personally be able to cope with it. Look at what you will need to do in order to cope with the repayments as well as the stress of having a loan for 6 months.