Short-term loans or payday loans as they are sometimes called can be incredibly beneficial for a lot of people, so it is important to learn all you can about them. If you need money immediately for a smaller amount, this is a great borrowing option to explore. The number of short-term loan applications in the UK has skyrocketed in recent years due to all of the benefits they offer. In this article you will learn everything you need to know about these loans before making a final decision.
What is a Short-Term Loan?
A short-term loan allows you to borrow smaller sums of money, usually from about £200 to over £2,000, over a certain period of time. A lot of short-term payday loans are given out for a period of two weeks. This allows the borrower to pay back the loan with their next paycheque. Some lenders give out loans with longer terms that can stretch up to a year. While a majority of payday loans are paid back in one lump sum, there are lenders that allow for instalment payments if the amount is large enough.
One of the primary reasons that so many people in the UK have fallen in love with short-term loans is that they are so easy to obtain in general. While there are some strict basic requirements for getting this type of loan, you don’t need to have good credit. Bad credit applicants are accepted all the time. Approval is never guaranteed for any loan, but your chances are very good in this case.
The Process is Very Quick
Once you start down the path to getting a payday loan, you will quickly realize just how quickly it happens. You can complete one of these loan applications in about an hour or so. When compared to all-day bank loan applications, that’s not bad at all. You should also get a prompt response from the lender to find out if you have been approved. This usually happens via email, though some lenders send a text message or call you on the phone.
It is Regulated
There was a time a time when payday loans weren’t really regulated at all, but those dark days are over. The fact is that there are some fairly extensive laws pertaining to payday loans that were recently passed. These laws and regulations protect borrowers, so you can rest easy knowing you are safe. Not all private lenders that give out these loans are reputable, but most of them are.
You Pay Less Interest
Another amazing thing about short-term loans is that they aren’t as expensive as long-term instalment loans by their very nature. Because the terms tend to be so short, you won’t have to deal with paying a ton of interest. This will ultimately save you quite a bit of money. Some private lenders give you the option of a longer term for your short-term loan, but it’s not ideal in most cases. The longer your loan term is, the more you will end up spending.
They are Ridiculously Convenient
Short-term loans are also known for being incredibly convenient, thanks to the advent of the internet. You can fill out your loan application online in no time, and even the contract is sent in digital format. If you get approved for one of these loans, the money is transferred into your account electronically. This all means that you won’t have to go anywhere to get a short-term loan these days. As long as you have a computer or mobile device and an internet connection, you are all set.
Smaller Borrowing Amounts
If you just need to borrow a few hundred pounds, you won’t have much luck going to a bank or even a credit union. Fortunately, there are plenty of private lenders that give out short term loans for smaller amounts. This means that you will very likely be able to get the precise amount of money that you need without any issues. You will, however, have to submit proof of your income with your application. The lender must decide that you make enough to pay back the loan by the due date in order to approve you for the loan.
Short-term loans are a viable borrowing option for most people. Even those who have impeccable credit get payday loans because of how beneficial they can be in so many different ways. This is by far the easiest, fastest and most convenient way to get fast cash. If you are in need of money to pay for something important, these loans can help. Just make sure that you take enough time to find the right lender. With so many options to choose from, you don’t want to select the wrong one.