There may come a time in our lives when our income simply isn’t enough to cover the costs of everything we need – this is where financial support can help. Whether you’re thinking about taking out payday loans for bad credit or applying for help in the form of benefits, you’ll need to consider a few factors before making your decision. Read on as we look at 5 questions that you should ask yourself before considering financial support of any kind.
What is considered financial support?
If you are struggling to manage your finances, whether you’ve been faced with an unprecedented expense, or you’re on a low income and are finding it difficult to make your money go further, you may be considering financial support to help keep you afloat. Many different types of financial support could be offered to you depending on your needs.
You could choose support from benefits you’d receive from the council or government schemes to give your finances a boost if you are struggling, or you could choose to take out a loan that is suited to your circumstances. Before you make a final decision on whether applying for support of any kind is the right option for you, there are a few questions that you should ask yourself – here are 5 examples:
1. What do you need it for?
Asking yourself what you need financial support for can help you to decide which type of support is best for you. For example, if you are faced with an emergency expense, you may benefit from a payday or short-term loan that can help you when you don’t have the funds saved to pay for it. If you’re on a low income and you need help to boost your finances each month, you could apply for benefits if you meet the criteria. It is important that you only apply for financial support if you really need it, especially if it is in the form of a loan as failure to pay it back could lead to further financial difficulty.
2. What are your options?
As mentioned previously, you should weigh up your options before deciding on the type of support you need. If you need to pay for a one-off expense, a short-term or payday loan could be advantageous to help you manage unprecedented costs. You could also look at benefits for low incomes, caring for children, or if you can’t work due to sickness or disability. There is even support in place from many local councils that can help you with your energy and food bills, or essential household items. It is crucial that you choose the right option for you and your financial situation.
3. Is your credit report and score in good shape?
This is particularly important if you have decided to take out a loan to help you manage your cash flow. Your credit score shows your chosen lender how risky it is to lend money to you, and therefore if your score is poor, you will be less likely to be approved for a loan. Your credit report shows lenders whether you have paid loans back in the past, so make sure that all information on your report is up to date, and that your credit score is up to scratch before you apply to give yourself the best chance of being approved.
4. Can you afford it?
If you’ve chosen to apply for a loan, you must weigh up whether you can afford it. A loan may seem like a good idea to help you in the short term, but you will have to pay it back, with interest too. Thankfully, a lot of loan companies will tailor their loans to suit you and your income but working out how much you can afford to repay each month means you can save yourself from ending up in financial difficulty.
5. Is your lender trustworthy?
If you’ve answered the previous questions and decided that you’d like to opt for a loan, you’ll need to take the time to choose a lender that you think you can trust. You should look for evidence that they are governed by the FCA, which indicates that they are legitimate and governed by a certain set of regulations to keep you safe. You should also check reviews from other customers to get an idea of the service they offer and ensure that you can get in touch with them quickly and easily.