The cost of living seems to keep going up, with no end in sight. Whether it’s the cost of housing, groceries, fuel, or other daily living expenses, it’s becoming increasingly difficult to make ends meet.
Increased prices and stagnant wages leave many people on the verge of financial instability.
But what if you could borrow the money you need to cover your basic living expenses with a loan?
Let’s explore the world of cost-of-living loans, and what you should consider before deciding whether to borrow money to cover your living expenses.
Why the cost of living has increased
Despite the latest figures showing inflation has fallen to 5.6% (down from a high of 7.2%), there’s no denying that in general, things cost a lot more than they did a couple of years ago.
The cost of living has gone up for various reasons, including inflation and supply chain issues.
Many people struggle to keep up with the growing cost of living. What’s worse is that these expenses often arise unexpectedly, making it challenging to plan for them properly.
What is a living expenses loan?
A living expenses loan, or cost of living loan, is a loan that you can take out to cover your daily expenses, such as rent, food, bills, and other living costs.
These loans can be short-term or long-term, and they can be secured or unsecured. You can use the loan to help cover a specific period of time or as an ongoing source of funding for your regular expenses.
Should you get a loan for living expenses?
Before getting a loan for living expenses, you need to consider your current financial situation.
If you’re already struggling to manage your money, borrowing more could make things worse.
However, if you have a stable income and can afford the repayments, a cost-of-living loan could help you stay afloat during financially difficult times.
You should also compare interest rates and fees from various lenders to find the best deal.
What are the benefits of a living expenses loan?
A living expenses loan can provide a few benefits, including both short-term and long-term perks.
Short-term advantages include the ability to stay current on your bills, preventing late fees or service cutoffs. Also, they’re a better option than buy now pay later or high-interest credit card debt if you get a good interest rate.
Long-term benefits include the chance to build credit and increase your financial stability.
How could a debt consolidation loan help keep down costs?
One way to get the money you need to cover the increasing cost of living, while also lowering your loan repayments, is through a debt consolidation loan.
Debt consolidation loans can be an essential tool in keeping down your living expenses. By consolidating credit cards and other high-interest debts into one loan, you can lower your monthly payments, therefore freeing up necessary cash for everyday living expenses.
Additionally, some debt consolidation loans can allow for more manageable monthly payments when there’s too much debt to repay comfortably.
Overall, it can be better to take out one larger loan over a longer period of time, than to have lots of small loans, or use credit cards or buy now pay later services like Afterpay.
Loansmart specialists in providing debt consolidation loans to Kiwis who want to get themselves in a better financial position, and lower their loan payments.
One recent example is the King family, who were drowning in a large amount of high-interest debt and had a poor credit score. The Loansmart team consolidated several of their high-interest loans into a new loan over a longer period, lowering their monthly loan payments from $2,000 to just $740! Plus, they ended up with $5,000 cash to complete much-needed house renovations.
Debt consolidation loans can be a great solution to help people on the path to better financial health.
What are some ways to manage increasing living costs?
Borrowing money to cover ongoing expenses isn’t always the best solution. However, there are ways to manage increasing living costs independently.
You can start by creating a budget, so you have a clear understanding of your expenses and can identify areas where you could make cutbacks.
Shop around for good deals on items you regularly buy, avoid impulse purchases, and maintain a good credit score so you can qualify for more favourable loans and credit cards.
How Loansmart can help you manage your living expenses
Choosing Loansmart is the smart way to get a handle on your finances. We move fast to get you the results you need, quickly. With our 3-minute online application and same-day approval, you’ll have the cash you need in no time.
When you apply for a loan through Loansmart, we scout various lenders to find you the best deal. As a result, you only have to submit one loan application, but it gets reviewed by multiple lenders. Your credit score can be negatively affected if you apply for too many loans, so you should make as few loan applications as possible.
Rather than you jumping through hoops, Loansmart does the heavy lifting for you. Simply choose the best deal for you, and we’ll handle the rest. The money you need will be at your fingertips on fair terms before you know it.
Contact Loansmart today for a free, no-obligation chat about your financial goals.