Do you have heavy unexpected bills piled up that needs to be paid and you cannot wait till the next payday to make the payments and neither do you have enough savings to cover up the expenses? There is no need for you to live in a financial stress when you can take a 3 month loan and solving all your short-term cash flow problems. You need not even be worried if you have a bad credit history or if you were bankrupt in the past.

As the name suggests, 3 month loan is a loan taken over a 3 month period. The loan typically has equal repayments for each month. Though the last payment might be slightly higher than the first two months payment.

3 month loans are a preferred option when you need a loan but not with a high cost of borrowing. Any loan taken for less than 3 months seem to be a short period to repay the loan. When a borrower takes a 3 months loan he has just about enough time to repay the loan amount and not be burdened with a heavy cost of borrowing.

The loan amount depends on your repaying capabilities. Anybody above the age of 18 years and working and who has a bank account can avail the 3 month loan. There is no restrictions on how the amount is being used. The banks usually do not bother with the borrower’s credit history. The 3 month loan is an unsecured loan.

In UK, a borrower can borrow up to £1500, but the lender will take into consideration your repaying capability and will ensure that you can comfortably return the money. Once the application is approved, the borrower gets the money credited to his account within 24 hours.

Typically a 3 month loan is taken in case of emergencies. If you have incurred an expense like a broken down car, repairing your washing machine, paying a plumber or fixing your roof etc.

Eligibility Criteria for applying for a 3 month loan

• The borrower must the resident of the country offering the loan. UK and US are known to offer 3 months loans.
• The borrower must have a bank account and a debit card.
• The borrower must be of the age 18 years and above and must be working.
• Different lenders have a different earning cut-off for the borrowers. Base on how much money the borrower is earning a certain loan amount will be sanctioned. The lenders will make sure that you can afford to pay back the loan amount in 3 months period.

Why a 3 month loan is better than a Payday loan?

At certain times, there is no way you can avoid an expense it could arise from emergency or it could be unplanned and you don’t have a rainy day that could cover the expenses arising out of such situations. If you do have to take a loan make sure you aren’t falling prey to loan sharks and to the payday loans. Never take a loan just because you want to buy an item or upgrade your lifestyle. What you need is something worth not going in debt for.

The best option you have when you need money immediately is to borrow from family and friends as that way you are not sucked into the whole debt all your life and end up paying almost twice the amount you took as a loan. People close to you will understand the emergency. But taking a payday loan is not a viable option because:

• Payday loans rely on you having a payroll and being employed. It is a short term unsecured loan. But not really worth the interest amount that you will be shelling out on the amount you borrowed. The lender is actually taking advantage of the vulnerable people. It is a difficult mess to get out of. You have to make the repayment and you won’t be allowed to take another loan to cover the repayment of the payday loan. The lenders prey and capitalize on the financially poor people.
• But a 3 month loan will give you 3 months period to pay off the loan
• There are plenty other options available to you apart from taking a payday loan. They might not further put you in the financial distress. The payday loans on the other hand are designed to keep you in a constant state of debt.
• 3 months loan are cleared within a period of 3 months.
• Payday loans are for a span till you get the next pay check. But most people’s pay check are just about enough to make all the payments and for the necessary expenses and the little money that will be left will go into their savings. When there is a debt to be repaid, it causes a huge dent in that budget, you might end up compromising. And hence at times, people end up taking another payday loan and the vicious circle keeps repeating itself. And you find yourself in a loop.
• 3 months loan is cleared in the span of 3 months and hence you are not stuck in debt for a long period.
• It is very tempting to take a payday loan as you get a loan for a small amount and you think you will be able to pay it back when the next paycheck comes in. but, what you don’t take into consideration is that you will be compromising on a certain budget of that particular month.
• When you take a 3 month loan, you will get ample time to plan out your budget and will not be in a financial distress.
• Some lenders will not even clearly lay out the interest that you will have to pay for the amount they are loaning you. You usually end up paying almost twice the amount. This will cause a huge dent in the financial budgeting of the next month.
• When you take a 3 months loan, you pay back the amount in 3 instalments and you won’t be required to pay one lump sum.
• The lenders will also not take into consideration if you have the means to repay the loan and most of the times, the borrower might not be so financially stable and may end up making more debts than he can repay.
• When sanctioning a 3 month loan, the lenders take into consideration if you can pay back the amount and sanction an amount that you can comfortably return without having to compromise on your other required expenses.

Accruing more debt is not what you would want by the end of the day. You will financially stress yourself out and this might affect the way you live and your health.

Advantages of 3 month loans

When you are taking a 3 month loan. You have about three months to repay the loan. And that is about enough time for you to save the amount and repay the loan.

• The loan period doesn’t have to extend and the loan amount is decided by the lender after they have taken into consideration if the borrower has the capability to repay the loan in the 3 months period provided to him. So, 3 months loans are better than the payday loan.
• A 3 month period will give you ample time to properly budget your finances and save for the loan. You can pay back the loan amount in three instalments thus not burdening you to pay the loan back in a lump sum as you have to with the payday loans.

It is better to live like a miser and pay off the loan immediately than continuing to live off on the money you don’t really have.

3 month loan in India

In India, there are 3 months loan offered to the borrowers. So what does a person do who is in need of cash immediately but doesn’t get a loan for a shorter loan period? As the need for cash is for a short term and that you want to be able to repay the loan sooner, in that case, the borrower can consider a bunch of other options instead of taking a loan for a longer period.

First off, go talk to your current banker with whom you have had maintained business with, for years. It could be a neighbourhood bank and if you have had a nice rapport with the manager, he will surely help you work out a deal that will work in your favour as well as the banks. Your current banker will be able to understand the need for finance for a shorter period. But, if you approach a new banker, he would not be so considerate of your situation and might not be able to help you out.

In India, if you have a fixed deposit account that you have maintained with any bank for a while, then the bank will provide you a loan up to the limit of the amount in fixed deposit account maintained with them. You will also be eligible to get a credit card up to the limit of the amount you have maintained in the fixed deposit account. Though the cash withdrawal limit might be lower, it will sort out your immediate cash requirement.

Indians are always saving money. If you have managed to save a certain amount, break the deposit and use the money. It is still better than you getting into more debt. Always try to stay away from debt as much as you can. It is better to find a way to manage your own expenses. At times, your reason to take a loan would be just outright unreasonable. Sometimes, it is not even worth taking a loan.

Remember, you can always borrow from your family and friends, who will be more than willing to help you out. Also, they will be more considerate of your situation and will not take advantage of the vulnerable situation that you are stuck in.

Then, there are also Co-operative societies that lend financial aid to their members. Make yourself aware of the various small lenders around the place that you reside. There is always be someone who will go out of their way to help you during the time of need. You can also approach the religious institutions that will have a certain amount set aside to help those who are in financial difficulties. If not, there are also NGO’s that will help you out. Always find an alternative to borrowing money from the bank, there will be a way out of the financial difficulty without you having to be stuck in debt for a longer period.

It is logically to turn to your family and friends first as they will be considerate of your financial situation and not try to exploit the fact that you are in urgent need for money. Also, you can set a reasonable interest rate and the term of the loan. But make sure you do not default on the payment as the relationships may suffer due to this. If the family member and friend is made aware in advance about you missing out the payment, it may save a lot of uncalled misunderstanding.

Stay away from the loan sharks and from the secured loans as there is no way out of the arrangement unless you have made all the payments. Save as much money as you can and try to stay away from getting more debt than that you can handle. Always clear off a loan first before taking another one. Do not take a loan unless it is actually necessary.