Considering Short Term Loans For Financial Support
Short term loans are popular for a good reason – they are known for providing quick cash. Unlike banks and other main street lenders, the small amount is released in as fast as one day, if not one hour. The decent amount is usually settled in as fast as two weeks or up to four (4) months, depending on the loan’s terms and conditions. Although it can’t be used to purchase properties, it’s a good option when you have unexpected expenses, running out of cash, or an emergency bill. Bad credit borrowers may find this option appealing since short term loans do not have strict criteria and complicated terms and conditions. With short term loans, you can borrow from £100 to £1000 and once approved, the money is transferred directly to your bank account, thus having a bank account under your name is crucial. The entire loan application is stress-free, instant, and easy, making it a good financial support when you can’t wait any longer. But despite its advantages, short term loans have several disadvantages to consider. Basically, it is very expensive and it often traps borrowers into a vicious cycle of debt. The high-interest rate charged is caused by the requirements; most lenders will not conduct a credit check, which is risky on their behalf, so to reduce the risk, the exorbitant interest drives incapable borrowers away. On top of this, there are additional charges applied in case the borrower failed the loan’s terms and conditions. For instance, you chose to extend the loan; the lender will allow rollover providing that you will agree with the newly incurred charges. Another drawback is the repayment term; most short term loans are settled in one lump sum, making it quite difficult if the repayment period is after two weeks or a month. Nevertheless, it’s a good option when you have a bad credit. Most loan providers will take the credit report as the primary factor to get approved, and this is what caused rejection to many borrowers. Companies use the credit rating to know to evaluate the loan seeker’s creditworthiness. But there are still lenders who will not use your credit score to come up with a decision, and one of which is the short term loans providers. Although a credit check is required, they will only use the credit score to find out the maximum amount you can borrow and the interest rate to be charged. The higher the credit remark, the lower the interest rate; the lower the credit remark, the more expensive the interest rate to be applied. But if you want a cheaper loan option and you’re having second thoughts with short term loans, you can go for the credit unions an alternative. The financial facility is cheaper since it is operated by its own members, rather than private lenders. This option is best when you need cheap short term loans or a friendlier customer service. Other options include payday loans, doorstep loans, or a logbook loan.
Taking Short Term Loans Online
Getting loans online is surprisingly fast and easy. To start your application, you need to fill out an online platform with personal and financial details, such as your name, email address, bank account, and employment information. Completing it takes 5 minutes or less and once you’re done, you can submit it without additional paperwork. A verification call will be conducted to know the accuracy of the information shared and once approved, the fund will be sent to your bank account. A working bank account is a crucial requirement because of its several purposes. Aside from receiving and repaying the loan through it, it supports your financial capability. Rather than based on the credit report, the company will evaluate your bank statement to know your creditworthiness. Having a solid proof of income also increases your chance of getting approved. Nevertheless, an excellent credit report is more beneficial. It gives the borrower a chance to have a higher loan amount, increased approval rate, and lower interest. The best part about short term loans is the easy approval. As long as you meet the basic requirements, such as the age, residency, and proof of income, you may get the lender’s approval. There’s no need for collateral or a guarantor; however, you need to prove the lender that you can oblige the loan’s terms and conditions. Below are the basic requirements that short term loans providers are looking for:
- The borrower should not be less than 18 years old.
- The borrower should be a UK resident or citizen.
- The borrower should have a working bank account.
- The borrower should show a proof of income in the form of salary, benefits, alimony, or pension.
Short Term Loans As Relief To Borrowers
Borrowers with a bad credit rating are mostly desperate because of the constant rejection. As a result, they turn to guarantor loans or secured options. Both loans are quite risk though so if you want to reduce any threat to your property or relationship, you can opt for short term loans. To ensure that you will get the best deal, below are some tips you can consider:
- Shop And Compare
Finding a lender is overwhelming but rather than choosing the first lender you see online, check different options. Shop and compare lenders by checking their rates, policies, and repayment option. This is one way to know which one will work best for you.
- Call The Lender
Most websites contain all the basic details you need to know about the loan and the lender; however, it’s always best to give them a call. Before you hit the dial button, create a list questions or clarifications and be sure that the lender can address it. Talking to the company’s customer service lets you have clear answers.
- Check Reviews
Short term loans providers who are on the top part of the search engine are not always the best lenders, thus instead of relying only on those who will appear on the first page, check on the lender’s feedback. Make a list of your potential companies and find out what their clients have to say about them. Are they transparent with their terms and conditions? Do they apply hidden charges? Are they harassing and intimidating?