Taking a loan doesn’t necessarily mean that you are stuck in a situation where you need cash to resolve the immediate problem. A loan is not always taken out when someone is facing financial difficulty. There are various reasons for which people choose to opt for a loan. You may take out a loan to fund your dream vacation, you may finance your wedding, or you may choose to pay your outstanding bills with the loan amount. The reason depends on the individual who is borrowing the loan. Short-term loans can be a great way to finance a large purchase or a smaller one. And finding one has become easier than ever before. Most of the people choose such loans as they are handy and can be applied for without much fuss. These are unsecured loans which can be borrowed without offering any kind of security to the lender. Also, you do not need a guarantor to co-sign the loan application with you.
Takeaways of this article:
- What is a short-term loan?
- 5 reasons to consider a short-term loan
- How to get a short-term loan online
A short-term loan is a type of unsecured personal loan that is borrowed by an individual for a shorter period of time, typically for a year or less. To apply for these loans, the borrower does not have to offer any security or guarantor. The loan amount one can apply for lies between a range of £100 to £1,000. The borrower has to make repayment of the loan in monthly instalments. One needs to have a steady and regular source of income to help the lenders make their decision quickly. Although Short-term Loans for Self-employed are available in the UK, still the borrowers have to prove their monthly income. Without proof, the lender may altogether turn down your loan application.
It is easier to arrange a short-term loan as they are fast and convenient. One doesn’t have to step out of their home to get the funds. By simply exploring the internet, you can find various options for applying for a short-term loan. Below listed are 5 amazing reasons for which, you must consider a short-term loan while facing a financial crunch:
Freedom of usage
There is no restriction on the usage of a short-term loan. A borrower can use the funds received for any purpose such as to cover an unexpected expense, to pay the medical bills, or to replace the boiler at the home. The usage completely depends on the borrower. However, as a borrower, you must not use the money to invest in the stock market or to lend that money to someone else.
Shorter period of time
With this type of loan, the maximum repayment tenure a borrower can choose is 12 months. Therefore, there is no longer a commitment for this loan. Many people feel that borrowing a loan for years is a financial burden that may impact their financial well-being. A short-term loan allows you to repay the loan quickly and you can easily move on without having to take any additional liability.
Online Short-term Loans are quite handy and are easy to apply for. An individual looking forward to borrowing an amount of money to bridge the gap between their monthly expenses and availability of funds can apply for a loan within just 2 minutes. The process of application for these credit products are quite simple and if the lender approves your loan application – you may receive the funds within a few hours of approval. However, the exact time for fund transfer also depends on your bank. Different lenders have a different set of rules that they follow, and you must read the fine print offered by the lender to know when exactly you may receive the funds.
You can choose your period of repayment and the maximum time that can be taken by you to repay the loan completely in 12 months. These loans have to be repaid in manageable monthly instalments. This will allow you to prepare a budget for your regular expenses and stick to it so that you can repay the loan, without any fail.
Plethora of options
You will find a plethora of options if you are finding a short-term loan online. There are many lenders and credit brokers who are authorised by the financial regulator – the Financial Conduct Authority (FCA) who offer these loans to the residents of the United Kingdom. With so many options available, it will be easier for you to choose the right loan.
Getting a short-term loan is easy and simple. There are many credit providers and brokers who are offering these loans. But you must apply for a loan with a financial firm that is authorised by the Financial Conduct Authority. Check the Financial Services Register to know the details of the firm such as contact details, trading names, permissions, and other basic information. All the firms that are registered by the financial regulator are listed in the register. And take out some time to find reviews given by prior customers to make your decision.
Before choosing a lender, evaluate the amount that you need. Never borrow an amount that cannot be repaid by you. Keeping in mind the affordability, choose the loan term and the amount. Fill in the online application form with all the necessary details. The lender will run a credit check to make their decision, and if they approve your loan application, the funds will be transferred by them to your bank account.
Always compare various loans by considering their Annual Percentage Rate (APRs) to know the overall cost of borrowing. Choose a loan after a thorough comparison to get the best deal available.
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