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The Risks of Quick Loans

While you are looking at all of the different quick loans available, you should bear in mind that they do come with some risks. These risks are important to look into before you start deciding that the quick loans are exactly what you will need.

The main risk with quick loans is your credit rating. One benefit is that they can help you improve it but only if you are sensible with your money. You will need to pay the money back that you owe for the quick loans at the end of the money. Just keeping £1 will put a black mark against your credit report. Yes, this £1 is not as bad as the full amount but it will still look bad to other lenders.

The problem with not paying these quick loans back is that you will be showing that you are not financial responsible for one month. This will make it much harder to gain any other type of credit; if you cannot make one monthly payment then how will you make regular monthly installments?

Another risk is to your bank. No, taking the money out will not mean that your bank details are at risk, it is more about the amount of money in your bank. You run the risk of going into your overdraft with some of the lenders that offer quick loans. Some will now ask to set up a direct debit to ensure that they get their money back. While this sounds like a great idea and will mean that you do not need to think about the quick loans once you have used the money, you will need to make sure that there is enough money in the account to cover the amount of the loan coming out. You could find that you accidentally going into your overdraft or the direct debit is bounced back to you, which incurs charges.

Quick loans are unsecured so you are lucky to find that your home or car will not be taken if you fail to make a payment. However, if you rack yourself up in debt with the quick loans, you could find that you are indivertibly putting your home or car at risk. There are many people who claim bankruptcy because they have taken out too many loans and can no longer afford to pay the money back for one reason or another.

You also run the risk of taking out more money than you actually need. You will often see that you can take out £1000 but you will need to consider whether you really need this amount of money. There are fees placed on the money and you will find that you have to pay an extra £300 for a £1000 rather than an extra £30 on the £100 loan. This is something that you should bear in mind and only take out the money that you do really need; such as the total amount for the bill or repair costs.

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