Instant gratification – that’s what we need every time when we are stuck in a situation. We all need a quick resolution to our problems. Personal loans are one such quick fix that helps us to resolve our financial necessities almost instantly. Not only necessities, even if you have your eyes on a new car or you want to make some major improvements to your home – a personal loan can always support you with enough funds for your purpose. A quick loan is nothing but a personal loan that is taken out by a borrower within minutes of applying for a loan.
This is an ultimate guide to quick loan in the UK and we will discuss:
- What is a quick loan?
- Pros and cons of a quick loan
- Things to consider before taking a loan
- Is a quick loan right for you?
What is a Quick Loan?
A Quick Loan is a type of unsecured personal loan. That means these loans can be borrowed quickly and the borrowing doesn’t need much time. Basically, by quick, what it means is the nature of the personal loan. These loans are not backed by collateral like your house, your car or any other valuable possessions. If you fail to pay back the money that you have borrowed from the lender, they do not have the right to seize your assets and hence, there is no risk of any collateral damage. Personal loans are excellent financial tools, which are handy for emergency needs. You can fund any large expense or deal with a financial crisis with the help of this loan easily. However, as compared to secured loans wherein you have to use a mortgage to avail a loan, the rate of interest is slightly higher.
Pros and Cons of a Quick Loan
Eligibility criteria for approval of your loan application depend on several different factors. Every lender and financial institution have their own set of criteria that describes the type of borrower they want to work with. One lender may not accept your application while another one may happily lend money to you. Despite so much of plus points, you must weigh this option carefully by considering its pros and cons.
|Fixed-rate of interest: The monthly repayment amount will be predictable every month. That means you can easily plan and budget for your regular expenses by keeping up with the repayments.||High rate of interest: As these loans are unsecured, no collateral is taken by the lender at the time of borrowing. The lender takes the risk by lending money to the borrower without having anything as security. That is the reason personal loans have a high rate of interest as compared to secured ones.|
|Unsecured: You do not have to offer any of your valuable possessions as security to avail the loan. Even if you fail to repay the loan due to some circumstances, your valuables cannot be possessed by the lender.||Damages credit score: If you fail to repay the loan or if you miss a repayment – your credit score will be damaged. And with a poor credit score, it becomes difficult to find and avail a loan.|
|Quick availability: These loans can be availed really fast and quick. One doesn’t have to wait for months and months to get the funds. A few lenders transfer the funds to the borrower’s bank account within minutes of application approval.||Prepayment penalties: Some lenders may charge you an additional fee if you pay off your loan before than the agreed date.|
|Pay in instalments: Unlike credit cards, you have to repay the loan amount in fixed monthly instalments. You do not have to arrange money for a lump sum repayment. Choose the repayment tenure according to your needs and financial circumstances.||Debt trap: If you keep on defaulting on your repayments, the lender will keep adding fees and charges to your loan. And after a certain period, the debt may become unmanageable putting you into a debt trap.|
|Multiple Usage: As a borrower, you have the authority to spend the money for any purpose, except for any illegal one. You can use the money for home improvement, debt consolidation, fund a wedding, finance your dream holiday, etc.|
Things to Consider Before Taking a Loan
Undoubtedly, personal loans are a lucrative option of borrowing money when we are hit by some emergencies, but they can land you in serious debt associated troubles if you do not manage it wisely. There are a few things that you must take into consideration while applying for quick loans online and they are listed below:
Total Cost of Borrowing
Evaluate the total cost of borrowing by including the rate of interest and the Annual Percentage Rate. Consider other fees and charges as well to assess the cost, which will allow you to plan and manage your loan.
Always monitor your financial position before borrowing. Your affordability of the loan plays a significant role in the entire process. Determine how much you can manage to repay easily and draft a plan accordingly.
Interest Rates & APR
Never compare apples to oranges. While comparing the loans to find the best one for your needs, compare the different APRs offered by the lenders and not only the interest rates. APRs will help you know the overall cost of borrowing.
Is a Quick Loan Right for You?
Deciding whether a quick cash loan is right for you is not difficult if you know what parameters to consider while making the decision. Affordability, as already discussed, is a major parameter that indicates whether you should opt for a personal loan or not. If you do not know how you will repay the loan, then it is better to find out other alternatives that may work for you. And you must also go through the Terms & Conditions of the lender to know what you are going to deal with. If you know that you will be able to repay the loan easily, without any fail, then this loan may prove to be beneficial for you during uncertain times.
To apply for a quick loan with us, click here.