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There are many things that you can use an instalment loan for. In fact, the lender will have no interest in what you are using the money for and so it would be perfectly fine to use the money to pay for some treats. However, it is always worth asking yourself whether the loan is the right way to pay for treats or if it should be used for other things. Also checking whether an instalment loan is the right type of loan for this sort of purchase.

What is an instalment loan?

It is worth making sure that you are aware of what an instalment loan is to start with. These are short-term loans where you will only borrow money for a short amount of time, perhaps a few months or up to a year. You will repay in monthly instalments. These came about because people who had payday loans found it hard to repay in a lump sum, so they spread the repayments making them easier to manage. The loans such as those offered by Boutell Loans are usually arranged quickly and are available to most people, including those with a poor credit record.

Should loans be used for luxuries?

Loans serve all sorts of different purposes and it can be difficult to say what they should or should not be used for. Some loans are used to help people to better themselves and improve their future finances, such as student loans or mortgages. Some are used for emergencies to help people too pay bills or things like that and short-term loans are often used for this. Others are used for purchases where borrowers do not have enough money to afford something immediately so they spread the payments, such as when buying a car, white goods or doing home renovations. Many of these things are luxury items.

Some people might recommend that for things which are not necessary, then we perhaps should avoid borrowing and save up instead. This is sensible and cheaper, but some people may not be good at saving up. It can be hard to make sure that you keep that money aside and do not spend it. You may also need the items before you will have time to save up for them. You may find it easier to repay a loan than to put that much money in a savings account each month instead. However, it can be worth considering whether, if you set up a direct debit to put money in an account each month, whether that would work for you as a savings technique compared with getting a loan and paying the extra money associated with that.

Should Instalment loans be used for treats?

There are many possible uses for instalment loans and there is no stipulation form the lender as to what you should use them for. It is sensible to think about whether you are prepared to pay the extra cost for the item as you are using a loan to pay for it. Whenever you borrow money there will be a cost. You will be charged interest on the money that you borrow and you may need to pay other fees as well. You will need to think about whether this is something that you can afford and are prepared to pay. Think about how much extra you will be paying for the item because you are using a loan to pay for it and if you are happy about paying that extra. You should be able to find out how much the loan will cost you in total if you get in touch with the lender and this should help you to decide whether you think that it is worth getting one.

Often, we might justify borrowing money because the treat is for someone else, perhaps our child, rather than us. This is okay as long as we are sure that we can afford to repay it. It is always wise to look into how much it will cost to repay the loan so that we can check whether we will be able to afford it. It is worth carefully checking out previous bank statements to see whether you would normally have enough money to pay for it and if you do not think that you will then try to find a loan which has lower repayments or consider whether you need to forget borrowing for a while until you can afford it.

It is therefore worth thinking hard about borrowing to buy treats. Consider whether a loan is a good way to do this as it will cost you more money to buy things this way. Also decide whether an instalment loan might be the best type of loan. It is also wise to compare different lenders so that you can find the one that is likely to give you the best value for money.

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There are different methods that you can use which could make it easier for you to repay your guarantor loans. The loans can be extremely useful for allowing those with a poor credit record be able to borrow money, but they need to be repaid just like any other loan. It is good to think about how you will do this so that you are prepared and there are some things that you can do to make it easier as well.

How do repayments work?
With a guarantor loan, the repayments are made monthly. The borrower will be expected to make the repayments as they will for any other loan. However, they will have a guarantor so if they do miss a repayment, the guarantor will repay instead. The way this payment is organised will be set up by the lender and could vary between lenders. There may or may not be extra charges involved and who pays these may also vary. However, you will probably want to work really hard to make sure that your guarantor does not have to make those repayments. It is likely that you will want to make sure that you do everything that you can to make sure that you make the repayments yourself.

How to make repayments easier
There are different things that you can do which will make it easier to ensure that you can make those payments.

  • Choose the right loan – when you are looking at different lenders have a look at how much you will be expected to repay each month. Think about what you can afford and pick one that you think you will manage. You may find that the loan will be more expensive because you will be repaying it for longer or you might not be able to borrow so much money. However, if you are more easily able to repay it, then this could be worth it. There are lots of lenders to compare and it is worth considering them all to find the right one for you.
  • Budget carefully – it is really important to start budgeting carefully when you have a financial commitment like this. You will need to think about how much you think you can afford anyway, but you may also need to be careful with where else you are spending money. Make sure that you prioritise your spending so that you pay for the important things first. For example, make sure that all your bills and loan repayments are paid and you buy food before you buy any treats. It can be helpful to set up all your bills to be paid by direct debit just after you get paid. Then you will be able to ensure that the money is there to pay them and you know what is left will be there for you to spend on food and luxuries.
  • Spend less – it might be necessary for you to start spending less money. You might need to think about where you might be able to cut down. You might eb able to compare prices on things like utilities or insurance and be able to switch providers and save money. You may also be able to swap retailers so that you are paying less for things like food. By paying less for what you normally buy, you will not feel like you are depriving yourself but you will still be saving money. It might be necessary for you to buy less as well though. It can be worth asking yourself whether you really want certain items so that you can carefully decide whether you want to spend that money. It might be that you can cut down quite easily.

Earn more – earning more money might sound difficult, but there might be some ways that you can get more money that would not be too hard for you. If you have the time, for example, you might be able to work more hours in your job or take on a second job so that you can get more money coming in. This is not always possible of course, but there might still be other money-making options. You might be able to do some work from home to make extra money, such as freelance or online work, which could help while you are looking after family members and things like that. It could be possible to rent out some of your home to make some money or to sell things that you no longer need. Another possibility is to monetise a hobby that you have, so perhaps sell things you make or produce online tutorials and things like that so that you can make money from something fun. There are plenty of things you could try out if you really want to.

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