A short term loan is the easiest, fastest and the most straightforward borrowing process, especially when you need fast cash. You can apply for the loan and be approved within the same day—no waiting times and visiting at the bank. You can do it straight out from your smartphone and start applying online. To know more about short term loans, here are two types that you can avail during financial lows.
A payday loan is a type of short term loan that can be released as fast as possible with one scheduled repayment. The term connotes the process itself since you get to repay the loan on your next pay date schedule. Lenders help you access faster cash without going through a strenuous process since you can apply directly online. Payday loans can come in handy whenever you have to pay for something, and you’re short of budget.
It’s Advantages for Borrowers
- Payday loans are now accessible to any UK consumers through the tip of their fingers. All you need is working the internet and a smartphone. You’re just a click away for the money you wish to borrow.
- There are no excessive interest rates and hidden charges to pay. Other alternatives can have hidden charges that add more burden. Payday loans do away with it.
- You only pay for one time, making you more debt-free as fast as possible. This will help you achieve a better credit score.
- Amounts released are designed to be payable for one time, since it’s relatively low.
An instalment loan is another type of short term loan in the UK that lets its lenders borrow a certain amount of money that could be payable for 3-12 months. Compared to payday loans, this alternative lets you borrow a much larger amount to support a greater cause. Most common instalment loan applied is for a house or car mortgage. This type of loan comes in handy when you need to finish off paying off your dream house or car.
It’s Benefits for Borrowers
- It has a much more flexible instalment repayment schedule. The lender ensures that the consumer won’t miss any payments by introducing a more flexible repayment schedule. You get to choose if you want to pay weekly or monthly depending on your pay date so it would be more convenient for you.
- You can pay in advance. Borrowers always aim to pay debts as fast as possible. With instalment loans it lets you pay in advance if you have extra cash to finish your debt faster than the set schedule.
- Interest rates are fixed—no need to worry about increasing rates that you need to pay.
- The lender presents suitable loans fit for your needs and their requirements. Both parties will benefit without incurring additional financial risks, especially on the side of the borrower. The goal is to get fast cash that you can pay off with your current income.
Short term loans are not a threat with your credit score since it aids you financially for a short period of time. Lenders are making it easier for you to only borrow a certain amount that you need that you can easily pay for one time or in less than six months. This gives you better financial freedom without having to worry about having debt.
You must be familiar with how short term loans work. This will give you a better understanding of how you stand financially and if you can commit with the repayment schedules. As long as you know your responsibility as a lender, you should be fine availing any of these two short term loans in times of financial crisis.