Short Term Loan Myths Busted

You may have heard some negative things about the short-term loan industry, but much of this is based on a misunderstanding of how they work. Perhaps you’re in need of some extra cash but are hesitant to take out a loan having heard some misleading information. We are here to set the record straight so you can make an informed decision about dealing with your finances.

Short Term Borrowing Is Very Expensive

Short term loans seem to often get a bad wrap in the media when interest rates are discussed. While there’s no doubt that the annualised interest rates for short term loans are high when compared to most other forms of borrowing, the point often missed is that these loans are a short-term arrangement and never intended to run for a year or more.

So, while the interest rate may seem high, the dollar amount of interest paid is generally low, as these loans are repaid within a few weeks. For these reason, a short-term loan often works out to be cheaper than other forms of borrowing in the long run.

Only People with Financial Problems Use Short Term Loans

It’s common for people to spend what they earn, leaving little in the pay packet at the end of the week. This is true even for those in higher income brackets. When we’re confronted with an unexpected cost, such as a medical emergency or unexpected household or car expense, we can find ourselves in need of emergency finance. That’s what short term loans are here for.

The Loan Will Be Difficult to Pay Back

A short-term loan will only be granted to you if the loan company is sure that you will be able to afford the repayments without worrying.

There Will Be Hidden Terms and Conditions

You might have heard that short term loans companies mislead consumers with deceiving interest rates and hidden fees, but this is just not true. You can get an accurate estimate of the total cost of your loan before you’ve even applied, and will have a clear repayment schedule so you will know exactly how much to pay back and when.

I Can’t Get a Loan, I Have Poor Credit

Approval for a short-term loan is largely based on your ability to pay it back over a reasonably short period.  If you can demonstrate an ability to meet your current financial obligations and have sufficient income, then there is every chance your application will be considered favourably. 

The fact that you may have had trouble repaying a loan in the past does not automatically mean you will not be able to get a short-term loan.  People's circumstances can change over time, and what matters the most is your current financial situation.

Taking Out a Loan Is Irresponsible

Making the decision to sort out your finances with a short-term loan is anything but irresponsible. Using a credit card or long term bank loan means paying back mounting interest over time with no guarantee of when you’ll be debt free, whereas with a short-term loan you will know the precise total interest due and date it will be paid back as soon as you are approved.

If you would like to get a short-term loan from Chequers Finance then call us now on 09 299 7883 or visit our website for more ways to get in touch.

You may have heard some negative things about the short-term loan industry, but much of this is based on a misunderstanding of how they work. Perhaps you’re in need of some extra cash but are hesitant to take out a loan having heard some misleading information.

Visit us at any of our branches:

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Chequers Finance Hamilton

Caro House
137 Alexandra Street
Hamilton
Phone: 07 838 2939

Chequers Finance Henderson

334 Great North Road
Henderson
Auckland
Phone: 09 836 6201

Chequers Finance Papakura

155 Great South Road
Papakura
Auckland
Phone: 09 299 7883

Chequers Finance Otahuhu

13 Criterion Street
Otahuhu
Auckland
Ph: (09) 276 4384