Short-term Loans

Short-term Loans: How to Choose the Right one?

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When you are running short of funds, you look for quick avenues for borrowing. From sudden car break down to seasonal flu, any of the urgent needs can result in an ad hoc hunt for quick loans. However, this seems a little daunting when you are unable to borrow from traditional banks and high street lenders with bad credit score. For, they generally have strict regulations to choose their creditworthy borrowers.

However, in the past decade, the growth of the online financial market is phenomenal in the UK and many regulated loan partners have opened financial firms for such borrowers on the web. Moreover, there is a wide range of Short-term loans available for the ultimate convenience of the borrowers.

Listed below are the 3 most popular forms of short-term loans, which one can use to resolve their urgent monetary troubles:

Payday Loans

Touted as a bad credit borrower’s haven, 80 percent of payday borrowers go for online deals. In fact, many of these borrowers go for multiple payday loans in the same year. As the name suggests payday loans are very small loans, which are required to be repaid on your next payday.

Most borrowers opt for payday loans up to £500 in the UK. Typically, they would pay £80-£100 as interest on payday loan of £500 in a month. Online payday loans are easily available. In fact, some of the lenders claim that you can borrow money within 20 minutes. The loan disbursal time always depends on the lender. Please note that a payday loan can be taken out for 3 months as well. Again, the repayment period depends on the lender one chooses to go with.

Doorstep Loans

Those who seek easy repayment loans despite fast disbursement prefer to go for doorstep loans. Unlike payday loans, you get to pay in weekly, bi-monthly or monthly instalments in doorstep loans. Doorstep loans are home credit facility, which is available to borrowers at their doorstep. An agent from the lender will visit the borrower and discuss all the Terms & Conditions. This saves a lot of time and effort.

Acquiring loans at the comfort of one’s home is now possible due to such lenders and loan brokers.

Homeowner Loans

Another quick way to borrow a loan, even with a bad credit score is to apply for homeowner loans. If you are a homeowner and you need some extra funds to repair or renovate your home, opt for this loan. Ensure that the amount you borrow can be easily repaid by you so that it doesn’t impact your credit score. Timely repayment of loans is the first step to manage your debts. Plan your repayment strategy beforehand and calculate the total amount required to avoid ending up in a debt spiral.

Short-term Personal Loans

All these loans are categorised as a short-term personal loan that one can use to treat financial emergencies. Using these loans responsibly can result in successful debt management. Emergencies knock our front doors unexpectedly if you are not prepared for it, then these loans may prove to be beneficial. You can also start your own emergency fund. This is the best option to deal with any financial constraint. An emergency fund can act as an ultimate safety net for individuals in need of funds.

Choose a loan according to your needs and requirements. Write down everything on a paper like for what purpose you need a loan, how much is required and how can you pay back easily? Refine the sheet by cutting down unnecessary expenses and then finalise the loan amount. Discuss with your friends and family if you are not sure. Check for alternatives, and then if you decide to go for a loan, opt for one and repay the debt on time.