Can Taking On Another Loan Save You Money?
When you are in a situation where you are either dealing with a personal financial crisis or are just simply in need of some additional cash flow for some reason or another, you can choose from several different options designed to help individuals in such circumstances.
Your overall goal, however, should be to find a solution for your cash flow issues, whether short-term or long-term, in such a way as to incur the lowest additional costs as possible. There is no such thing as free money, but there are ways of saving money when it comes to finding a solution to your financial problems.
In certain situations, it might very well be the case that taking on an additional loan is the answer you are looking for. While there is no true one-size-fits-all solution to all money problems out there, you might be surprised to learn that the most affordable option available to you at this time is to in fact take on another loan.
The Nature of Short-Term Loans
When one is considering taking on another loan, this isn’t to say that any type of loan that you can find will be the cheapest option out there. Instead, some long-term loans with high-interest rates can end up costing you more money down the line. If you look at a short-term loan, though, you might just find the solution you are after. Moreover, depending on what your credit score currently is, you might not be able to find a long-term loan option at this point in time. EP Wealth has specific advice for business owners.
Trusted lenders like CashLady offer short-term or payday loans to individuals who might have a less than desirable credit rating and who require a smaller loan to aid in a short-term financial situation. Even though on the surface such a loan will mean an incredibly high APR, the idea behind the structure of a payday loan is that it will be repaid within a month or two. For this reason, you will actually end up paying far less in interest than would be the case if you were to take out a larger loan with a high APR from a bank.
Another significant way in which taking out a loan can aid you in saving money, in the long run, is through debt consolidation. When you have a large amount of debt on things like high-interest credit cards, you end up spending more money, the slower you pay them off. By taking out a loan, you can pay off your credit cards right away and then repay the loan over time, typically at a lower interest rate than a credit card.
According to the financial experts at Forbes, taking this approach to debt consolidation not only helps you save in the long run, but it also allows you to become debt-free quicker. While there is no harm in doing such things as taking on additional side-jobs to increase your cash flow and thus repay your debts faster, you would still be paying more than is necessary for interest if you choose not to consolidate your debt.