One of the biggest mistakes that people make is assuming that their need for a loan is urgent and that paying it off will be an effortless process that will be over in no time.
It is a very rare occurrence that a borrower will take out a single, short-term loan, repay it on time and never go into short-term debt again.
Once you get into the habit of taking out short-term loans to tide you over till next pay day, you’re likely to become a regular customer for many of the worst (and most expensive) micro lenders. Do not fall victim to the fly-by-night lenders offering loans for bad credit; this type of lending will only serve to worsen your situation so, if you absolutely must get a loan use a reputable provider such as Loansmart, Wespac, Max Loans or, any of these reputable providers.
If you’re really committed to getting out of debt you need to do whatever it takes to ensure you don’t take out another loan – for as long as is necessary to clear your current debts.
Considering taking out another loan?
Perhaps to pay off an existing one, you had better stop and re-evaluate the reasons that you’re doing it. I guarantee you that the reason you’re looking to take out that loan is probably not a cash emergency by any definition of the word and, if it is, you should be looking at alternative ways of dealing with the situation or, getting hold of the money you need to resolve the emergency.
If your problem isn’t with short-term debt as we’ve spoken about above then it may be in long-term debt such as a mortgage or car loan.
If you’re struggling to pay off these debts then it’s even more critical that you ensure you don’t take on any more debt. If you cannot, for whatever reason, continue to pay your debts then you certainly need to approach your lender and inform them of your situation.
They may consider allowing you to enter into a temporary grace period, so that you can resolve whatever is causing you financial struggle or, perhaps, regain your previous level of income.
If you’re still up-to-date on all of your payments and just want to get out of the debt you’re in a little faster than it goes without saying that this point still applies to you; to get out you simply have to stop going in.