Shetland Finance

Loans and lending.

Can I use Instalment loans to buy Train Fares?

If you need to pay a train fare, perhaps for travel to work, then you will need to find the money to pay for it. It might be that you are running out of money and cannot afford it or that you want to buy a cheaper season ticket but need to find a lump sum of money. If you need money like this then you might wonder whether an instalment loan will be a good option.

Can you borrow enough?

You firstly need to think about whether you will be able to get all of the money that you need from the loan that you are choosing. Make sure that you know how much the train fare will be and whether you can afford any of it without borrowing. It might be that you will be able to supply some money but not all of it. Then you will need to see whether the loan will provide you with enough money.  With instalment loans you can normally borrow up to £1,000 but this depends on the lender. You may also find that if you are a first time borrower, that the lender will only let you have smaller amounts of money. This may mean that you might not be able to borrow enough. This will depend on the lender though and it can be worth finding out how much different ones will be prepared to lend you and then you will be able to decide whether this option might work for you.

Can you afford to repay it?

It is also well worth looking at the amounts you will need to repay and when. It is likely that you will have to make a series of repayments across a few months. This should make it easier to manage them as they are spread but you will need to make sure that you can afford them still. It will be wise to find out exactly how much they are and then look at your previous bank statements to be able to work out whether you would normally be able to afford that extra money. If not, then have a look at where you will be able to cut back your spending or whether you will be able to earn some more money so that you will be able to more easily afford it.

Are you happy with the cost?

It is a good idea to think about whether you are happy with the cost of the loan. If you are using the money for a season ticket because it is cheaper than individual fares, for example, you need to find out whether, once you account for the cost of the loan, it really is cheaper. Therefore, find out from the lender how much the loan will cost and you will be able to work it out. Even if you are paying for individual fares, you still should look at the cost of the loan, to decide whether it is worth it. It might be the case that you will be better off finding an alternative way to get the money or perhaps using an alternative form of transport instead.

Do you have other options?

It is also worth thinking about whether there are alternatives to borrowing the money using an instalment loan. It is always wise to compare the different lenders that offer these loans to see which is likely to provide you with the best value for money. You should also think about whether you feel that this is the best type of loan to use. There are other loans that might be able to provide you with what you want but they will work differently. This means that you might be able to find a loan that suits you better.

It is also a good idea to see whether there are any alternative to loans so that you can get the money without having to borrow it. You might be able to work some more hours or sell some things to get some more money. You may be able to buy less things to free up some money too. Think about all of your options so that you can be sure that you have picked the right one.

It may seem like a lot of things to think about. It is worth the effort though. It could make quite a difference in many ways. You could find it will be easier to repay the loan if you pick a specific one, some options might be cheaper than others and some could be easier for you. Consider what is important to you, so that you are able to pick the option that will suit you the best. It will be worth it and it could make the difference between a good and bad borrowing experience.

How Could Instalment Loans Help me?

It is often good to think about how certain loan types might benefit you. This is because you will need to know about the different types of loan if you are in a situation where you need to borrow money. It can be a good idea to therefore research all types of loan. It could be the case that you already know about some, perhaps because you have used them or your parents did or they are just well-known loans. With instalment loans, you may find that you are less sure about how they work. This could be because they are fairly new, not so well-known or you have not used them before. It is a good idea to know the main features of them so that you can decide if they seem like they will work for you.

  • No credit check – although strictly speaking, all lenders do a credit check, it is done differently with these loans. This is because most lenders will look at the credit report and check to see how much risk they are taking on. They will look to see if the potential borrower looks trustworthy by looking at whether they feel they will be able to repay the loan. If they can see evidence that they have repaid loans before, not missed repayments in the past or make regular repayments and have an income, then they will lend to them. However, if they feel that they cannot be trusted then not only will they not lend to them, but it will show on the credit report that they have been turned down. With instalment loans, there is no credit check like this. The lender will do a soft credit check and therefore will not leave a trace on the persons credit record so no one will know they looked. Also they will not look for the same things and will not be worried about whether they have evidence they can repay as this is not important to them.
  • Quick to arrange – instalment loans are usually quick to arrange as well. Lenders will often be prepared to help out people who need money in an emergency. This means that they will process the applications really quickly and it might even be possible for some people to have the money that they need in their account within a few hours. This can be a lot quicker than some other types of loan. Some loans can take weeks to arrange and if you are in an emergency situation you will just not be able to wait that long. You may even find that instalment lenders might be open overnight and at weekends so they will be able to provide money when other lenders cannot.
  • Borrow small amounts – sometimes we only need a small amount of money. It is not always that easy to find a loan for a small amount though. It can sometimes be tempting to borrow more than you need because you want a bit of extra money to treat yourself. However, it will all need to be repaid and if you borrow a large amount this could be harder and it will take longer. Therefore, it could feel far less overwhelming if you borrow a smaller amount of money and you will be able to do this with an instalment loan.
  • Repay in instalments – There are some types of loans, which are similar to instalment loans but have to be repaid in a lump sum. These are called payday loans. This can be difficult to manage if you owe a lot of money and if you have a lot of other payments that you also have to find the money for. Therefore, if you can spread the repayments over a few months, then it will be easier to afford everything that you need to pay for. If you cannot afford a repayment you will have to pay an extra fee and this will mean that the loan will be dearer, No one wants to have to do this and so if you spread the repayments, each will be smaller and easier to manage and the chances of you not being able to repay are much smaller.

So, once you know how instalment loans differ from other types of loans, you will be able to start to see how they may be able to help you. If you are in a situation where you have a poor credit record or where you need to borrow a small amount or where you need to get money quickly and you cannot afford to repay a large sum of money all at once, then they can be extremely useful for you. It is good to know they are available so when you do need money, you can decide whether they will suit you.