Be careful not to overstretch your finances over Christmas

Industry experts say you need to take care not to overstretch your finances over the Christmas season, warning people away from taking out short term loans if they will not be able to afford to repay them on time.

While providers of instant cash loans offer a crucial service to Brits caught out with an emergency in between pay cheques, experts say you should be wary of taking out such short term loans unless you know for a certainty that you can repay them on time.  Much like any other form of lending, there are charges and fees for failing to repay the loan on time, and with so many Brits facing economic uncertainty, overspending on Christmas celebrations and gifts is an excellent way to end up in the red in the New Year.

This has led many experts, such Jim McKenzie from the Citizen’s Advice Bureau in Truro to caution against taking out short term lending if there is even a remote possibility that you may not be able to repay it.  The pressure is turned up high to overspend during this time of year, said Mr McKenzie, especially for families that have young children that have been watching television adverts for all the newest games and toys that are on sale this Christmas season, which can lead many to overuse their debit and credit cards until it becomes difficult to make ends meet.

Unauthorised overdrafts on current accounts can become quite the expense for those Brits who slip into the red, leading many to choose short term loans as an alternative since the majority of these loans are actually less costly to repay in regards to interest.  However, if you’ve already racked up so much debt that your next pay cheque is going straight out of your account, you won’t be able to repay the loan, leading to even higher debt once the fees and charges for neglecting timely repayment are levied against you.

A better solution would be to spend within your budget, said the CAB representative, even though this may lead to a Christmas that is slightly less merry than you would like.  However, making such a sensible decision can lead to better financial stability in the new year.

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