Perhaps the most problematic impact of the global financial crisis was for most people the drop in the availability of credit.  The increasing difficulty in obtaining loans from high street banks caused financial difficulties for many would be borrowers.  It can be hard to avoid a situation where a household needs to make a major purchase, but simply does not have sufficient funds to do so.  If a high street bank is unwilling to provide the service, borrowers can be left wishing they could rub a magic lamp and summon a magical Cash Genie.

A cash genie doesn’t have to be something from a Walt Disney film – in fact, there are companies out there who will provide short term loans almost immediately.  That said, it is important to always think carefully and strategically when applying for a cash advance. Primarily, one needs to be sure that a loan is repayable.  The lender is likely to give you an indication of the cost of your monthly repayments, and it is advisable to draw up a scheme of how these payments will fit into your current expenditures.  If there doesn’t seem to be a comfortable way of factoring in these outgoings, it is probably worth foregoing the loan, at least in the short term.

The other very important thing to be aware of is the interest rates you are going to be charged.  Anybody who borrows money will be charged for the service, and the charge depends on the body who is lending the money.  It is important to be aware of arrangement fees and early repayment penalties – ensure you have the maximum information about the loan you are taking out before you decide which loan to take.

Some lenders are likely to try to sell you loan protection insurance.  As another financial product offered by lending organizations, this can be a useful investment, but equally you must think carefully about whether you can afford the extra cost that this will add to your loan.  A good lender should be able to give you personal advice on whether this is the best option for you.

For most cash-strapped households, a magical Cash Genie is not going to appear and provide the funds to secure the purchase of a new bathroom.  But if you can gather enough research and information to be able to get a loan that suits you perfectly, you should find yourself perfectly able to meet your needs without resorting to Aladdin’s lamp.

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