April 7, 2006, Newsletter Issue #10: Drawbacks of Short-term Loans

Tip of the Week

The drawbacks of short-term loans is the fact that you even need one, because that means you don't have any cash savings to draw on when unexpected financial needs come up—as they always will and do. Financial planners recommend setting aside three to six months worth of take-home pay in an emergency fund to cover things like medical expenses, car repairs, and other unexpected expenses. Of course, that's easy for them to say as they pull down six-figure incomes. Few people are able to follow this advice. Does that mean you shouldn't at least try to save some money for emergencies? Not at all. Here's some useful advice on Short Term Loans: Even if you can only afford to put $50 a month aside, that's $600 a year. For now though, if you are considering a short term personal loan, try to find avoid using a payday lender unless you absolutely have no other options available. And, take this moment to think about your financial big picture. You may want to seek financial counseling to help you get things in order and get on your way to a more stress-free financial future.

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