Why Are Multiple Instant Loans Not An Option?
Installment loans are termed as quick loans for paying emergencies but, they are not an option for every need you encounter. Taking multiple loans at a path to disaster. Instant loans are undoubtedly a great idea to pay your short term money needs but should be availed with due care to make the best use of them.
Short Tenure
Payday Loans are crafted to help you address your short term monetary need. The longest tenure of the loan is 365 days, and the shortest is 90 days. Being the short loans, the EMI, which includes interest rates and the principal, is manageable when you take one. If the loans are multiple, you will find it challenging to repay two instant loans in the shortest tenure.
Chances Of Rejection
Instant loans carry a comparatively high interest rate, and your creditworthiness for the second loan while the first is open comes down, and there is a high chance of rejection for the second loan. Most of the lenders are no for offering the second loan while the first one runs through the portfolio as they look at greed and mismanagement of money rather than the need for time. Rejection of the loan during times of emergency hampers your credit score, and you may have to try hard to rebuild it.
Debit Crisis
Online loan lenders sanction the loan on simple terms but incorporate strict rules for denial and delay in the repayment of the loan. When you manage two high-interest rate loans, there are chances of delay in repayments of the loan, and you have to bear heavy penalties and fees where you will be pushed into a debt crisis. It is certainly hard to come out of it when running life managing the budgets between paychecks.
Caution
The Australian credit union's strict norm to lend an instant loan per year is two times for each borrower and it also advice the risk of lending the second one while one loan is already running. While most of the lenders step back offering the option, few may move a step ahead if you are their existing customer and have a good track of repayment history. While taking the loan, you should double-check if you need the loan and the amount you are availing through it. Don't get carried away with the display offers stated by the lenders. Make sure you have sound repayment capacity to repay both the loans hassle-free. Go for the option only when you have other financial alternatives available to pay for your emergency.
