When you need money urgently, you’re tempted to go to your friends or your family. If you have a credit card, you’re also tempted to use it for withdrawing money from it and using it as you want. However, it’s not always advisable to do so, because it can get you into more financial troubles.
The SMS loans are used for situations when you need money urgently. Wondering what an SMS loan is? The answer is very easy – it’s a short-term loan that is within different financial institutions. You’ll be able to get an SMS loan even if you have a bad credit history, but you need to pay attention to several things.
Let’s see some tips for using SMS loans.
An SMS loan has a very high-interest rate, so when you think about contracting this type of loan, you also need to answer a major question – why do you need the loan? It’s not worthy to get this sort of loan if you can wait some time for being paid or getting the paycheck.
The interest rates are so big, so it is possible for people to enter a cycle of repetitive debt. A debt spiral is very hard to avoid, and you need to pay attention to many things. You need to be true to yourself and evaluate the reason why you need the money. Achieving your goal can be substantial, but it’s more important to pay attention to the money that you will have to give back. It’s great to use an SMS loan for an unexpected purchase, but it’s not recommended to use the money for paying the bills or for living expenses.
If you still consider getting an SMS loan, you also need to know how much money you will have to give back. It is critical because different financial institutions that have this type of loan will have different interest rates and you’ll have to give back a lot of money.
Because of the typical annual percentage rate (the APR) and the interest rate, you’ll need to know exactly how much money you need to give back because this can make the difference between getting the loan or not. You need to read everything in the contract, even the fine printed lines and ask as many questions as you need until you get everything clear.
Multiple Lenders No
It is another rule that you have to have in mind constantly. Using more than one lenders will make it harder to pay back all that you have to pay. Just imagine that if you consider five financial institutions and if you ask each of them to give you $100 each, you will have a total of $500. However, when you have to give back the money, you’ll have to give more than what was taken, and that $500 can transform into $1500, as you might have to pay $300 to each of your lenders.
It’s hard to do this thing, so it’s always advisable to use only one bank at a time. If you can afford to give back all the money, then take a larger amount. However, don’t use more than one lender because it can bring you into a debt spiral that is very hard to exit.
In the end, you need to pay attention to everything that you sign with an SMS loan because you’ll have to give back the money in a very short amount of time and it’s important to make sure that you can pay it in time.