If you’re new to the world of short-term finance or you’re looking around to find out what types of finance are available to you, where do you start? There are so many options available for you to choose from that actually deciding on the right one for you can be confusing.
The worst outcome would be selecting a loan that isn’t best suited to your needs so it’s always worth finding doing your research and finding out more. So, what do you need to know?
Which loan is right for you?
Sometimes referred to as home credit loans, doorstep loans are a type of personal loan. When you’ve borrowed money from a doorstep loan provider, an agent from the lender’s company calls round to your house to collect your repayments usually every week.
This kind of loan is best suited to people who want to borrow a smaller amount of money and who want to have an easy, weekly repayment schedule to stick to.
A quick loan is exactly that – a way to borrow money as quickly as possible. Whether you have an emergency that needs to be taken care of or an unexpected change in your budget, quick loans allow you access to the money you need normally on the same day. They’re paid straight into your bank account by the lender.
These loans are best suited to people who have an immediate need for money, normally to cover an emergency. There are many different repayment periods that are available meaning these loans are a very popular choice among borrowers.
Payday loans are for smaller sums of money (usually a few hundred pounds) where the borrower pays back the entire amount they took out plus the interest on the loan on the day they next receive their wages or within 30 days.
Payday loan borrowers usually receive the money they need on the same day and it’s paid directly into their bank account. If you’re thinking about taking out a payday loan, remember that, because there’s only one repayment, you should make sure you’ll be able to settle you loan in full and on that particular date.
Instalment loans are loans taken out over 12 months or less by borrowers. If you want to borrow more than a few hundred pounds and you’re concerned that you’d be unable to repay it all back including interest on one day as you would have to with a payday, then an instalment loan is probably more suitable for you.
You choose the number of repayments you want to make. Make sure that you’ll be able to afford the repayments on the days that they’re due and that they won’t put you in financial difficulty or hardship.
Short-term loans are another way of describing instalment loans. Short-term loans are generally over three or four months rather than a longer period of time.
There was a time when only those with a stable and permanent job would be considered for a loan. Now, anybody in any industry who has a regular income can apply. Loans for self-employed people focus on your ability to repay the loan so there’s a lot more emphasis on making the loan work around your personal financial situation.
Self-employed loans are taken out by people who own their own businesses including contractors and freelancers. You could be a sole trader or the director of your own company. Self-employed loans must be used for personal reasons and not for the benefit of your business.
No guarantor loans
A very bad credit report can often stand in the way of successfully applying for a loan. However, there are loans available to borrowers with lower credit scores but they require someone else with a higher credit score to act as a guarantor. But what if you have a low credit score and you can’t find somebody to be your guarantor?
No guarantor loans can help. They are short-term loans which offer you the ability to borrow money for a fixed time period without the need for a guarantor or a perfect credit history.
12-month loans are the longest forms of instalment loans. For all payday loans and short-term loans available on the market, the amount you need to pay back every month is generally the lowest. That makes 12-month loans easier to budget for but you’ll pay more interest on these types of loan.
No credit check loans – do they exist?
If you have multiple credit checks against your name in a short space of time, it may appear to lenders (who can see all of this information) that you are desperate for money – even if that’s not the case.
You may have seen some companies advertise “no credit check loans”. Be careful though because they are not what they appear to be. All Financial Conduct Authority licensed lenders and brokers (like 786Loans) must carry out a credit check prior to offering a loan to a customer. If no credit check is carried out on an applicant, a lender is acting contrary to the rules they must follow to keep their licence.
What “no credit check loans” actually mean is that a lender or a broker will carry out a “soft credit check” on you when you’ve made an application. A soft credit check will give them an idea of the amount of money they’re prepared to lend you and at what interest rate. However, every Financial Conduct Authority lender must carry out a full credit search prior to making you a firm offer.
Getting a loan with 786Loans
At 786Loans, it’s our job to find you the most suitable loan at the cheapest rates possible and that’s even if you have a poor credit score.
The way we do this is that, when we receive your application, we package all the information you give us together with your credit report and send it to the lenders we know will be the most likely to want to lend you money. The information we send over includes how much you want to borrow, how long you want to borrow it for, and your income and expenditure details.
Within a few seconds, the lenders who are interested in working with you come back with their first offer. Each lender can see each other’s offer and what happens next is what makes 786Loans different from every other broker.
Once each lender’s first offer is on the table, a bidding process starts. One lender might offer you the money you need at one particular interest rate only to be followed by another lender offering you the same amount of money at a cheaper rate. This process continues until we find the lender willing to make you the best offer. That offer is then locked in. You’re under no obligation to accept any offer made by one of 786Loan’s panel of lenders.
This all happens in seconds so that you’re not kept waiting to get the cheapest interest rate on the loan you want.
To start your application, please click here.