Exercise caution when looking for a non-traditional loan
These days many people are looking to get finance or credit of some sort, but because of the difficult financial climate and the increased caution being exercised by lenders many are finding it increasingly difficult to get the finance that they need.
As a result of this there are many borrowers that are turning to less traditional means of getting credit or raising finance, and whilst some of these options can prove useful and helpful for consumers industry officials have warned that caution should always be exercised to ensure that the deals that are available are fair and affordable.
There are a number of options available to those that need to get money but cannot afford to get credit from traditional lenders. However, before jumping in and taking up one of these options it is important for consumers to consider the cons as well as the pros, and to ensure that they are not getting ripped off as a result of the transaction.
One of the options that people might use when they are unable to get traditional finance is a payday loans company, which offer short term loans to tide borrowers over until payday. The APR charged on these loans can be very high. However, most will charge a fixed fee such as £10 per £100 borrowed and if you are only borrowing over a short period this may be an affordable option. Most do not carry out credit checks either, although proof of income must be provided. If you are considering a payday loan make sure that you check a few and compare the fees and charges so that you can get the best deal.
Another option that many people might look at is to get cash for gold, with a plethora of advertisements trying to tempt consumers to send in their gold jewellery in exchange for cash. However, many reports have claimed that the consumer often only gets a fraction of the value of the jewellery when doing this so you need to make sure that this is a viable option for you and don’t let yourself get ripped off over how much you are paid for your jewellery.
Finally, many people that cannot get mainstream finance may be tempted by doorstep lenders, and more worryingly loan sharks. You should bear in mind that with doorstep lenders you may be charged an extortionate rate of interest, which could be financially crippling. When it comes to loan sharks you should always avoid them and look at alternatives, as these are unregulated and often unscrupulous lenders, and you could end up in very hot water by borrowing through them.
Tags: personal finance, finance, credit, difficult financial climate, Payday loan, mainstream finance, rate, traditional finance
