While lenders have a legal and ethical responsibility in lending money to individuals, each person who makes the decision to borrow money is expected to do so responsibly. Comparing what lenders have to offer helps borrowers to get the best value for their money.
Learning about short term loans and control of personal spending is a good starting point. Consumers learn to borrow money responsibly by prioritising the purpose of the loan, whether for home or business expense; understanding the types of loans available and responsible lending practices; comparing lending terms, conditions and costs; and learning what it means to be responsible when taking out a loan.
Lenders assist financial borrowers by screening their personal financial health for suitable short term lending, and by providing information about taking out and repaying loans. Creditors look at each person’s financial strength to determine if they will be able to meet the loan requirements.
The credit score is an indicator of an individual’s ability to repay a loan. Gaining a credit report from a credit checking agency helps potential borrowers understand their credit score and how to manage their credit-worthiness and their ability to repay debts, such as a short term loan.
Responsible lenders turn individuals down for loans when their credit score reflects an inability to maintain a level of loan repayment. Being responsible in managing debts means money repayments need to be prioritised and made on time to prevent default, interest accumulation, and runaway debt increases.