Short Term Loans

5 Best Reasons to Consider Short Term Loans

Short term loans have become the best solution for financial emergencies to many UK residents. Many people do not want to worry about monthly payments for many years. Because of this, they would most likely prefer taking a loan that they can pay back in a few months. Aside from allowing a borrower to be debt-free after a few months to one year, there are other reasons why UK citizens prefer to take short term loans.

Borrowers Can Get the Funds Quickly

Taking a short term credit could mean approval of application and release of funds on the same day. Such speedy processing is not possible when you apply for a loan that is payable for many years. Because the amount is usually more than what one can borrow short term, lenders make sure that the borrower can afford to pay them back. Lending companies would typically conduct a background and credit check before approving your loan application, which could take a day or longer. They would grant the loan once the results of the history and credit check indicate that you are trustworthy. Credit checks could take time and delay the approval of your loan.

Borrowers Do Not Need Collateral

When you apply for a long term loan, the lender would usually require collateral such as your car or your house. If you do not own anything of value, you might not be able to borrow money. Why put up your property as collateral when you can apply for a one that does not require you to offer security? Applying for short term credit is a good option. Because the amount that you borrow is payable in a short time, lenders find it unnecessary to ask a borrower for collateral. A person that does not have a property to offer as security can still get cash for his dire needs.

Borrowers Do Not Have to Worry about Debt for a Long Time

Thinking where to get the money for your next payment schedule can be stressful. When you see yourself worrying about the same thing monthly for two years or five years can be frustrating unless your financial status has changed for the better.  However, there are financial institutions that would not allow you to pay back your debt in full before the end of the term. If you do, they will penalize you. With a short term loan, you can repay the lender anytime you have the money to pay for your remaining balance.

Borrowers Can Use the Funds from Short Term Loan for Any Thing

Many traditional lenders ask why you need to borrow. Other lending companies would have specific purposes. Banks offer a housing loan, which is specifically for the purchase or renovation of a house. Small business loans would be for starting a business. In contrast, a borrower may opt for a multipurpose loan for education, medical bills, or business. With a short term loan, lenders do not ask why you need to borrow money. Although a lender might discourage you from using the funds for trivial things, they would still let you spend the money any way you want.

Borrowers Can Enjoy Low-cost Credit

A loan has a corresponding cost in terms of interest rate and other charges. Taking a 5-month loan could cost less than a five-year loan. You might think that the interest is not much because you pay small amounts every month. Nevertheless, if you compute all the money you paid for interest rate, you would realize how much of your payments have gone to the interest alone.

Because of the above-mentioned reasons, most people in the UK that needs quick cash prefer to take a short term loan.

Secured Loans

Important Precautions to Take Before Applying for a Secured Loan

Secured loans allow individuals (even ones that have a somewhat poor credit rating) to borrow large amounts of money. This is due to the fact that banks require everyone who wants to get a secured loan to offer collateral.  In most cases, the collateral is in the form of a car, your house, or a possession that is of equal or greater value that then loan. In the event that you are unable to repay the money, the bank is entitled to take possession of your property.

This having been said, losing your property is often a worst-case scenario that can be avoided if you take a few simple precautions. Keep in mind that some of these require effort in the long-term while others can be checked off the list right before submitting your request. Here is what you need to do in order to safely take out a secured loan:

Improve Your Credit Rating over Time

One of the most important things that you should do before applying for a secured loan also requires the least amount of time, but the highest level of commitment. All lenders will look at your credit rating when determining what kind of terms and conditions they will offer you. Unfortunately, your credit rating must be built over time, which means that you have to constantly make sure that you repay your loans on time, and have an overall good relationship with lenders.

Generally speaking, you can improve your credit rating by not submitting too many loan requests in a short amount of time, taking out loans that you repay on time, having financial stability, and not changing workplaces too often, among others.

Repay Your Other Loans or Consolidate Your Debt

Secured loans are serious long-term financial commitments. If you intend to request one from a lender, make sure that any other debt that you may have is not too expensive. If you are already making monthly payments form other loans, it may be difficult to also repay the money from the secured loan. Repaying or consolidating other debt that you may have will make it easier to repay the secured loan while also increasing your credit rating.

If you have credit cards that you use on a daily or weekly basis, try paying them off before getting the loan. This will increase your credit rating and enable the lender to give you a slightly lower interest rate. Furthermore, avoid taking out payday loans at least 5-6 months before applying for the secured one.

Create a Safety Buffer in Case You Are Laid Off

If you do not have any guarantees that you will maintain the same workplace AND income for the full duration of the loan, create a safety buffer that will enable you to keep making the monthly payments even if you were to lose your job. Ideally, this buffer should be a bank account that will contain the equivalent of 2-3 months’ repayment instalments.

Determine What Refinancing Options You Will Have in the Future

In the event that you may not be able to repay all the money on time, look at what refinancing options you will have. This is usually best done through personal research. In some cases, if you ask the lender what refinancing options you would have may lead to them believing that you do not expect to be able to repay the money.

Shop Around and Be Smart When It Comes to the Collateral

Lastly, look at the offers of multiple lenders before applying for a loan and try to find one that will give you more flexibility in terms of collateral. Where some banks may only give you a secured loan if you put up your home as collateral, others may accept other guarantees such as rural property or vehicles.

Payday Loans

Things to Consider Before Taking a Payday Loan

Are your utility bills piling up and you do not have enough cash to cover all? Do you find it hard to survive until the next payday? Many UK residents are in the same predicament. Some people feel that it is embarrassing to borrow money from friends and relatives. Fortunately, there are several quick loans for those in dire need, and one of them is the payday loan. Payday loans can be accessed online and can be had a few hours after applying. However, before hitting the submit button, one must consider the following:

Consider the Amount That You Need and If You Can Afford to Repay Your Debt

A payday loan is a short term one, which you must pay back during your payday. Before writing down the amount that you want to borrow, consider the salary that you receive every month. Is it enough to allow you to pay your debt? If not, then, only borrow what you can afford and be ready to make some sacrifices until you have settled all your debts.

You can cut down your expenses so that you would be able to pay your loan promptly. Late repayment can be costly. Besides, it could seriously affect your credit rating.

You Cannot Take the Loan and Forget about It

A payday loan is a money that you must not ignore after you have spent the funds. The smooth and speedy application and approval process also require prompt and full payment. Once you are late in paying, the lender will charge interest daily, and before you know it; your debt has already ballooned.

To make sure that you have the money to settle your debt, stop spending for non-essentials like weekend shopping, movies, and outing. The amount you spend for these unimportant activities might be enough to pay back what you borrowed. When you forget your loan, the ill effects of your negligence can lead to more money problems.

Provide Honest Answers in Your Application

Being honest in answering the questions in the application form will allow the lender to come up with a repayment term to suit your situation. Do not ask to borrow an amount that you can hardly afford or indicate a repayment period that you cannot meet. Promising to settle your debt within three months when you know very well that your income may not be enough would be an irresponsible action on your part.

Remember That Your Repayment Would Be the Amount That You Borrowed plus the Interest Rate

If you borrowed £300 for six months, you might think that raising £50 a month would be a breeze. But remember that you must pay the interest as well, which means that you will need to raise more than £50 on your due date. Make sure to be ready with your repayment weeks before the repayment schedule. Prompt payments would prevent penalties and additional charges for late payments, which could make it more difficult for you to pay your debt.

Inform the Lender in Advance If You Are Having Issues in Paying Back Your Loan

Although payday lenders are strict when it comes to repayment, always inform them if you cannot make a full payment. They can help you find ways to make it easy for you to make regular payments. Payday loans are flexible. The lender might extend the repayment period to reduce the monthly payment to an amount that you can afford.

Payday loans are useful when you need cash urgently. However, to avoid penalties and charges, always pay back your loan diligently and promptly.

Secured Loans

How to Avoid Losing Your Property When Unable to Repay a Secured Loan?

Although borrowing large amounts of money does not longer require near-perfect credit ratings, the lenders do still ask you to provide considerable collateral in order to guarantee the loan. Despite the sheer amount of money that you can borrow through one, a secured loan can also be extremely dangerous, especially in times of economic instability.

Although most lenders will not intently go about taking possession of your property, they will do so if there is no other way for them to recover the money that they’ve loan you. This having been said, if you have taken out a large secured loan and have, for whatever reason, ended up in a position that prevents you from repaying the loan, there are a few things that you can do in order to prevent the lender from taking possession of your property:

Consider Refinancing the Debt

The first option that you should consider is refinancing the secured loan. This course of action is usually the best choice if your income drops or if the debt becomes too expensive. If you have made the monthly payments on time and have a good relationship with the lenders, they are likely to work with you in giving you a better deal than before.

Refinancing a loan essentially means that you will take out another loan that can be used to cover the remaining money that you have to pay. The new loan usually has a lower interest rate and better overall terms and conditions. As a side-effect, you will also get a bit more time to figure out how to solve your financial issue.

Use a Debt Consolidation Loan to Make Your Loans More Affordable

If you have multiple forms of debt that are draining your monthly earnings, using a debt consolidation loan can make a world of difference. Debt consolidation loans essentially take all of your loans and turn them in a single debt, with a single interest rate. This is also done through a loan, however, this one is usually large enough to cover all the other ones that you may have.

Generally speaking, debt consolidation loans are also secured but have low interest rates, making them very affordable. They also have long terms, which means that you will be able to spread out the payments across 5-10 years.

Use an Online Lending Service to Get Money

If you are unable to make a monthly payment for a single month, there is always the possibility of using an online lending service in order to get the money. However, this solution is only useful on a short-term. For example, if you have been laid off and have already found a new job, but have to go through a 1-month unpaid training period, getting a short-term online loan can be extremely useful.

Most online lenders will approve your request and send you the money in under 24 hours, making this option great as a last resort.

To conclude

Secured loans can be dangerous, especially if you do not have the financial stability to maintain a constant monthly income or the economy is going through a recession. However, not having the money required to make one or two monthly repayments should not mean that the bank will take possession of your property.

Go through the options that we’ve presented above and select the one that suits you best. Keep in mind that, in some cases, you may be able to use multiple methods at the same time. For example, it is possible to consolidate smaller loans that you have and refinance the secured one. This will reduce the cost of your debt to a greater extent. On top of this, you can also take out an online loan. Keep in mind that online lending platforms do not perform credit rating checks and do not report loans to credit registers so your financial records will be unaffected.  

Bad Credit

Suffering from Bad Credit? Apply for No-guarantor Loan

Are you having a hard time taking a loan because of your bad credit? Receiving a rejection letter of your application for a loan can be frustrating, especially when you need cash badly. Someone advised you to have a guarantor, but you do not have a relative or friend who would serve as your guarantor. You might lose hope about getting the much-needed cash you are desperately trying to find. Don’t despair because it is not yet the end of the world. Why not look for a no-guarantor loan for people with bad credit? Here are the things that you could avail if you decide to apply for this type of loan.

You Can Take This Type of Loan Without a Guarantor

Some lenders understand the difficulty of finding someone with good credit to serve as a guarantor of your loan. You could not blame them. Guaranteeing payment for the debt of another person that might run away from his financial responsibilities can be scary. However, there are lending specialists that are willing to risk their money for people who have bad credit and no guarantor. You can use the internet to look for this type of lender, submit an application, and get funds quickly.

You Can Get Funds the Day You Applied

Just like any other types of quick loans, you can get the funds the same day that you submitted your loan. In the past, taking a loan of this type is impossible. However, several lenders have changed this situation by extending loans to people who would never have qualified in the past. Similar to other quick loans, borrowers can receive the funds a few hours after they have submitted their application. The decision to lend cash is instant, as well as the release of funds.

Bad Credit Is Not a Hindrance to Taking This Type of Loan

A No-Guarantor lender does not waste time asking would-be borrowers about their credit rating or other documents. The knowledge that some of the borrowers applying for a loan cannot afford high instalment payments made lenders offer a flexible repayment plan. Borrowers can pay back their debt within three months to five years without additional fees or charges. The lending company will find the right loan for your circumstances and needs.

Lends to Everyone in Need

A no-guarantor lender does not look at a person’s background, social, and financial status in life. Borrowing from direct lenders allows you to take a loan even if you are facing bankruptcy or you have a court judgment and order to pay a defaulted loan. People with this issue could never borrow from other lenders. However, with the no-guarantor lenders, even people with bad credit rating can get a loan.

Competitive Annual Percentage Rate (Apr)

The no guarantor loan offers a competitive annual percentage rate despite providing loan services to high-risk clients. Clients can expect an instant decision, speedy release of funds, and no hidden fees.   With a no-guarantor loan, clients can borrow money in a relaxed and quick manner. They can also enjoy competitive annual interest rates and flexible repayment plans and an opportunity to enhance their credit rating.

 For as long as you are applying for a small loan, you can borrow money despite your questionable credit history. You do not have to prepare lots of documents when you submit your application. You can expect for the release of the funds the same day that you apply. If you are unemployed, you can still apply for a loan without security or guarantor. Just show proof of other income like freelancing or an income from your property such as rentals.