What to Avoid when taking Flex Loans
Flex loans are non-bank direct lender payday loan derivatives which allow enhanced repayment terms versus traditional payday loans. However, some traits of payday loans are inherent to them and some traits are exclusive to flex loans. The same stands true for associated risks of the loans too. There are ways to mitigate such risks and here we discuss the key issues/actions one must avoid while taking a flex loan:
- Borrowing from just any lender without any homework: When taking a non-bank direct lender loan of any sort, it is absolutely important to do a little bit of research to ensure your lender is legitimate and reputable. Reading through some online reviews and looking out for accreditations of the lender’s business on their website, could make all the difference that you may need.
- Borrowing a payday loan for a longer term than you need: In very short term loans, each day costs. When you take a flex loan and you’re sure of exactly how long you shall take to repay, it is absolutely the right choice to take your loan for just that much duration.
- Choosing flex loans over other feasible options that are cheaper: Is any other cheaper loan available to you and can it serve you just as well? If you’re choosing a specialized flex loan just because it’s easier to apply, that’s probably not the right reason to be choosing this expensive loan product.
- Borrowing more calculating that the loan amount can be used for the first few repayments: A lot of borrowers choose loan amounts eyeing the possibility of utilizing a part of the loan amount to repay the loan. This is probably the easiest way to make you loan enormously expensive. Instead, taking a smaller loan with a schedule of repayment starting later, can serve the same purpose, still being a little cheaper.
- Borrowing when there’s no need at all: As said before, these are loans designed for urgent needs/emergencies. These aren’t intended to be a loan for general use and using it that way, can be a very expensive decision.
- Getting stuck in a debt cycle: A debt cycle is when a borrower falls into a situation when there’s an endless chain of debts which overpower the sources of income, leading to continuously remaining in debt that also increases with time. Being in this situation is not just financially damaging but also very stressful. It is absolutely essential to understand this fact and ensure it doesn’t turn into a reality for you, ever.