Things You Should Not Use A Loan For

At Moolr, we are passionate about finding finance for all. We look to say yes to 4 out of 5 applicants, even if you have had a mixed credit history. However, we only source funding for those we think a loan is the best option. It is not the right answer for all, and should only be used for specific needs and purposes. Moolr took a look at things you should not buy a loan for.

Holidays

Short-term loans are an excellent and speedy source of finance should an immediate need  arise that leaves you short of cash before your next payday. A loan is often designed to deal with the unexpected. A short-term “fix”. However, holidays do not come under this category, ever. They are a treat as such, a luxury, and not one you should go into debt for. If you feel you need a holiday and funds are tight, find alternative ways to get away. Look for last-minute deals or bargains, or downgrade your expectations.

Gifts

We love to exchange gifts, it feels great and shows someone you care. However, the list of occasions that seemingly require a gift in any given year can be overwhelming. Do not dip into debt to fulfil such requirements. If you are struggling to pay for gifts, then you have a couple of options. Speak to people and be honest, explaining that are on a tight budget and need to cut back. They will understand. Alternatively, improvises. Put thought into a gift rather than pure cash. Make something yourself perhaps – the thought will impress more than a more expensive present.

Gambling

Gambling can be fun, and that’s how it should always be. Gamble with what you can afford, and never chase losses. If you need to borrow money to have a bet, then you have a problem. Seek advice and talk to someone. And most importantly, stop gambling. This is certainly one of those things you should not use a loan for.

Business Investments

Many people make business investments, and taking out a loan to do so is perfectly normal practice. However, a short-term loan is totally inappropriate for such a situation. 

Paying Back Debts

Taking out debt to pay back debt, say to friends and family makes little sense. You are simply shifting your financial problems. The only situation this is appropriate is if it a debt consolidation loan. If you are reducing your monthly payments, then it could be feasible. Otherwise, you should avoid such a move.

Luxury Items

Treats are fine, they help us feel good. But they should only be used with money you already have at your disposal.

Paying back a Previous Payday Loan

Some lenders will allow borrowers to take out subsequent loans after their initial borrow. They are often called rollovers. We advise against it, as it simply does not deal with your debt problem. It also increases the total amount of money you will have to pay back.