Short-term loans are a fantastic option available to responsible adults in the UK.
Adults across the country all come to us for transparent, fast, and honest service. There’s a lot of utility in taking a short-term loan, and we wanted to spend some time today going over just why it’s such a solid choice for when the need arises. In this article, the team at Freshloan.co.uk will help you in clearing all your doubts about short-term loans.
What is a short-term loan?
In essence, a short-term loan is defined simply as a type of credit that’s obtained by a person who needs to meet short-term financial obligations. Short-term loans have proved ideal in the UK for their ability to help meet costs and requirements if borrowed over a typically flexible period to suit the needs of the applicant.
Better yet, a short-term loan can be beneficial to a responsible adult who needs to obtain a little extra ‘capital’ to make a significant life purchase that will benefit them in the long run. Whether for buying a house or making payments on a new car, taking out a short-term loan can be a prudent decision.
The features of your short-term loan
As the name implies, short-term loans are all about meeting the financial needs you have in the weeks and months ahead. A short-term loan has a shorter repayment window, meaning that your monthly repayment amounts will be higher. That is so that you can clear your repayments in a quicker amount of time – a fact that saves you a lot of money in repayment interest.
Compared to traditional loaning institutions like banks or other authorities, short-term loans also usually have less paperwork involved. They’re a faster way to get the money you need to get by and make life’s big purchases. The reduction in stress associated with a quicker application process is a benefit that’s enjoyed by many responsible adults.
Benefits of a short-term loan
So, we understand a bit better now what a short-term loan is – high! Let’s look now at a few more benefits and reasons for taking a short-term loan out if you need it.
They’re useful for starting businesses
Businesses are all about capital at the start, and the costs of getting established can be extensive. From buying the services of an agency to make a website or start a marketing campaign through to paying for advertisement space on Google or physical locations, there are lots to buy to get that growth going.
By taking out a short-term loan, companies can get the stimulus they need to make their goals and dreams a reality. Great stuff.
In case of an emergency
Life isn’t always about the expected. Even the most responsible adult out there can be hit from time to time by an unexpected bill, be it from a car breaking down or a part of the house needing fixing. When these things happen, the cost of not addressing them can be high, making acquiring a short-term loan.
How do I find a legitimate short-term loan online?
Ask yourself these questions before deciding on a short-term loan provider. If you say no to none, you might consider borrowing from someone else or at least doing a little more research.
- Does the provider have a good reputation? Try to find independent third-party reviews online that are or have been customers, or see how easily the lender can be contacted. You should also compare loan products with other providers to see if they are competitive.
- Does the provider operate legally? Some short-term loan providers use online loans as a way to avoid state restrictions, so make sure they act lawfully and in the best possible way. Please take a look at our state pages to learn about the laws that apply to where you live. You may want to check for physical locations in your area.
- Does the provider show the loan’s APR rate? Lenders must display the APR rate on their websites, even if the loan term does not go beyond one year. That is one of the best ideas for calculating how much your loans will cost you and helps you compare to other credit products with the same duration.
- Does the provider ask for the money until after giving the loan? If a lender asks you to deposit money before getting your funds, it could be a scam.
- Is the provider utterly transparent with the information? Some lenders use insurance policies to avoid state APR regulations, as they may have separate insurance. Insurance not only protects them (not for you, but for them) in the event of an accident but also allows them to force you to pay much more for a loan than you thought it would be.
- Is it possible to get a loan immediately if I don’t have a bank account?
Yes, it is. Some lenders offer loans without the need for a bank account. There ate two main options available, and those are prepaid debit card loans and store loans. You can apply for a loan at the store in person or online, and receive your money quickly by picking it up at a branch.
Lenders offering prepaid debit card loans issue a card and then load the approved amount onto the map so you can use it however you want. Some may even load money onto an existing prepaid debit card. They often come with fees. However, be sure to read the terms and conditions before using a card.
Renewing your payday loan
Many short-term loan providers offer you the option of paying a fee to extend the term of your loan; what they call to renew or “restart.” However, the charge is generally not what you should be concerned about: it is the increasing long-term interest that can make your loan impossible to pay.
Loan renewal and reinvestment fees are where many borrowers fall into a cycle of debt and are illegal in many states. Try to avoid it as much as possible.