3 important factors to consider before considering a loan

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How much do you need, how much you’ve got and how much time can you waste?

There’s always plenty of room for panic.

Especially when an emergency rears its ugly head. And when it does, our natural instinct is to immediately listen out for a number – how much is it going to cost. What happens next? We immediately wonder how we’ll be able to cover the cost. If you’re suddenly hit with a $3200 bill for emergency repairs or preventative maintenance, your initial response might be shock. And fair enough too. Immediately, you begin wondering where you’ll get that $3200 – or at least the balance to make up that $3200.

It’s not a good position to be in. But what you might find is that you don’t actually need that full amount. That’s right, things may not be as bad as they seem and no, we’re not blind optimists, we are realists. Let’s think about three factors that could and should affect the size of that cash loan you’re looking for.

Other income streams can affect the amount you need to borrow

Many of us have a fairly clear idea of our weekly or monthly expenses. We are not necessarily on top of it all the time, but we know what kind of bills to expect and when. The idea is of course to be able to cover this number with our regular pay and hopefully, be able to put a little aside for, well… life. The enjoyment of life is also something we should budget for but that is a discussion for another time. But let’s touch on something else that life throws in our way from time to time – panic. When a large, unexpected expense hits, the tendency may be to panic and the only number you can think of in terms of income is the number that hits your bank account from your employer on a regular basis. Panic can often blind you to your:

periodic dividends on investments
rental income from a property you own
additional earnings from part time or casual work

If you do have your savings tied up in a fixed term arrangement of some sort and you want to keep it that way, remember, you still may not have to cover the full amount with a quick loan.

Explore the knock-on effects of your situation to accurately estimate your loan

Let’s head in the opposite direction now. Ask yourself if you truly understand the full cost of that emergency or opportunity (keep in mind, fast cash loans aren’t just for negative occurrences in life).

So that plumbing catastrophe that has made your place uninhabitable – sure the repair bill will be costly, but what about the carpet cleaning, what about a place to stay until the odour dissipates? Or think about those holiday flights and hotel reservations – do you like pina coladas as the song goes? Because they probably won’t all be free.

It pays to think about the effects of the incidents, accidents or opportunities you are dealing with and factor in a bit of breathing space. Use [insert link to online calculator] to identify the amount that best suits your purposes.

How much patience can you afford?

Time is always a factor and they do say that time is money. If you’re in no particular rush to fund a longer term project sure, you can wait, you can take the traditional route through a traditional lender. Hey, you could even just keep saving the money yourself. But what if it’s a time-sensitive situation? What if you need a 1-hour loan or an instant loan? That changes everything – including repayments and interest situations. So, you need to balance time with the size of repayment and then both balance and budget accordingly.

At Me Loan, we prioritise finding the right lender with the best offer for your set of circumstances. However, you must remember that you have a part to play in getting the best loan offer.

Calculate how much you really need based on your entire income
Identify any hidden costs or knock-on costs that might come a-knockin’
Understand the timing imperative that will most likely shape your repayments and interest

As mentioned at the beginning of this article, there’s plenty of room for panic, but there’s always room for careful and calm consideration. Hopefully this helps you see the bigger picture.

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