Regardless of your income size, you oftentimes find yourself running out of money. Low income is partly blame to a cash shortage, but most of the time, it is your spending habits that make you broke at the end of the month. Financial experts suggest that you should create an emergency cushion. It must be worth six-month of living cost.

Having an emergency cushion can help you tide over your expenses when an unexpected expenditure pops up. However, sometimes the situation becomes worse that it becomes hard to rely on your savings to meet your expenses. The best example to such a scenario is COVID19 crisis.

The outbreak of COVID19 pandemic has sucked employment from the economy making many people unemployed. This is the most difficult time to make ends meet. Despite savings you will no longer be able to tide over for a long time as it is unexpected when the situation comes back on the right track.

Income sources have whittled down, but expenses are refusing to go down. In fact, people who have become the victim of COVID19 are struggling to pay their medical bills. Therefore, it is not surprising that you need loans to stay afloat.

Now the question is whether you should take out bad credit loans to fund an emergency during COVID19 crisis or you should consider an alternative. The search query related to where to get a loan in Ireland with bad credit has tremendously increased. It shows that people are in need of money to meet their funds.

Considering affordability is a must

Whether a bad credit loan will be your friend or foe, it depends on your financial circumstances. Undoubtedly, you will have borrow money from a direct lender when you need money for an emergency, but it does not mean that you will not consider your affordability.

For instance, if you need €400 to have your laptop repaired, you will have to figure out whether you can pay it back or not. In order for determining your affordability, you need to create a budget to evaluate your expenses. Make sure that you have left enough money to repay your loan after meeting your expenses.

 If you find a shortage of cash, you will have to cut back on monthly expenses. Of course, it is hard to know the total cost of the loan before you apply for it, but you can get an estimate through online calculator. If you borrow money more than your affordability, you will end up taking a toll on your finances.

Interest rates matter a lot

Various lenders are out there who are offering loans for bad credit, but every lender charges different interest rates. When you need money, make sure that you choose a lender that offers the loan at competitive interest rates.

You should research beforehand so that you do not need to rush when you want to borrow money. Make sure that the lender you choose does not charge a processing fee or hidden fee. Some lenders are so flexible that they do not charge prepayment penalty when you pay off the loan before the due date.

Since lenders know that people are in need of money during COVID19 crisis, they are trying to be flexible with interest rates. Before you apply for a bad credit loan, make sure that it is offering the loan at lowest interest rates.

Need vs. want

Bad credit loans can become your foe when you do not differentiate between needs and wants. Financial experts suggest that you should take out money only when you need it. if you need money for a medical treatment, it is your need. If you need money to buy clothes, it is your want.

As you know that you do not have enough money coming in, you should be careful with borrowing money. Avoid borrowing money unless you need it urgently and for essential expenses.

Try to put off expenses as long as you can. For instance, if you need to have your wall painted, you can put off this expenditure as this is not essential and you can postpone this.

Now that you must have got your answer. Bad credit loans are not foe as long as you are sensible with borrowing money. If you borrow money more than your affordability, it will take a toll on your finances. Make sure that you do not take out a loan to fund your wants or expenses that are not essential or you can put off. Borrowing money recklessly can further damage your financial situation, so it is crucial that you are being cautious while borrowing money during COVID19 crisis.

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