The short-term loans are the credits that are made available for maximum 12 months period. These are offered often at high Annual Percentage Rate (APR) while the borrowed money is normally low; it may be as less as £ 50. Borrowing for short-term is a good option if the requirement of funds is for short-term and unavoidable. It is good when the required amount can’t be arranged from alternative resources including relatives and friends. It is also good for the people who don’t have regular steady income; it helps them manage the routine living expenses during low income period. This type of borrowing is unsecured in most of the cases. Numbers of direct lenders offer short-term unsecured loans online eliminating all the documentation formalities; just serving the few personal and professional details online is sufficient to get the required financial help within a day.
Types of Short-Term Loans You Can Rely In 2019:
Doorstep loan – As the name denotes, the required cash help is provided at your door step once you successfully apply online and the application is approved by the lender. The agent comes to your home to verify the details and to assess the affordability. If satisfied the cash is delivered on the spot. Such loans are often credited with weekly cash installment condition.
Payday loan – It is the most popular and most sought after small amount loan type. Employed people trust this loan type as being the anytime financial help that helps them meet out short-term finance needs. The loan is credited into salary account within few hours or a day. The loan amount depends upon the salary amount and job security. The complete borrowed amount is to be paid in single installment on pay day. These loans are provided at very high APR; therefore, the cost should be your major concern.
Online/installment loan – This short-term loan is provided for maximum 12 months. The borrower has to repay 12 equal monthly installments at particular date. The loan amount may be more than it is in payday loan or cash door step loan. Like other loans, the complete process is online; the loan amount is transferred to saving account within a day. Although the borrower pays the interest for 12 months but the installment loan is provided at lower annual percentage rate if compare to payday loan.
Over draft loan – It is also a small amount loan that is available at your regular bank. With approval of overdraft facility, you can withdraw the required amount from the bank account. It is liked because of its flexibility in repayment. Some banks offer this facility even at 0% interest rate for a certain period. The credit score report major role in approval. It is the best affordable loan facility but only for the people having good credit score and steady income.
Borrowing from credit union – It is also a popular way of taking short-term financial help with least formalities. Credit unions are the loan cooperatives having savings of members. The credit union members pool the savings for lending to a member in need of quick cash. Interest rate varies according to the borrower’s credibility but remains within legal limit set by Govt.
The Factors You Should Reconsider Before Borrowing:
There are other loan types also in addition to the above mentioned short-term loan types to get the required small amount without hassle but the associate factors deliver long-term good or bad impacts on your financial status.
Before initiating the borrowing process, you must reconsider following three factors to keep the debts well under control:
Objective – Some intended usages requiring funds seem urgent at first look but if you reconsider the importance of intended use, you will find it avoidable or you can delay it at least. Discussing with family members is a good way to decide and avoid borrowing.
Income and expenses – Having regular income is good but you have to meet out living expenses also in addition to installments of other debts. Reconsider your affordability to pay the additional cost of fresh loan.
Existing loans– Before applying for a fresh loan, better you wait for few days or a month if some existing loan is going to be repaid in complete. More loans at one time affect your credit score report.