Taking a short term loan has been an option for many UK residents who are in an emergency. There are hundreds of lending companies in the UK that offer different kinds of short term loans. Taking one can help you solve your financial problems, especially those that need immediate payment such as hospital bills, utility bills, and other emergencies. However, although taking a short term loan has become easy, paying it back might be a challenge. To avoid more problems, you must choose the right short term loan to take.
Here are some tips on how to choose the right short term, loan lender.
Check the Requirements
Choose a short term lender that asks for basic requirements such as proof of your identity and address. If the lender requires a good credit rating, you can go to another lender if you are sure that you have a short credit history. If you continue to apply, the lending company could check your credit history, and this can affect your credit rating. Also, f you are jobless or do not have a stable income, applying for a loan that asks you to give a copy of your certificate of employment or payslip could be pointless.
Check the Amount That You Can Borrow
Make sure that the amount that you want to borrow is within the range of the loan amount that the lending company offers. If you need £1500, and the lender provides a quick loan of £500 to £1,000, it would be a waste of time applying for a loan in this company unless you would try to get another loan from a different lender. Besides, other lenders lend up to £5000 without requiring a credit check or rating.
Learn the Interest Rate
With the many lending companies operating in the UK, the interest rate can vary from lender to lender. After searching for lending institutions with minimum requirements, compare the interest rate. Apply to the one with the lowest interest rate per annum. The difference might be small, but when applied to your loan, the amount could be significant.
Consider the Speed of Processing and Releasing of Funds
Some lenders promise the speedy processing and release of funds. However, not all of them stand by their promise. You can end up waiting for several days to receive the funds. There are many ways of finding out if a lender observes fast processing or approval. You can find reviews on some websites that would tell you how a lender conducts his business. Customer reviews are reliable because they write about their experience with a specific lender. Please stay away from those with several customers, giving them a negative review.
Go For Companies with Repayment Schedule That You Can Manage
Some lenders have a brief repayment period. Some quick loans are payable on the next payday while others have a repayment period of six months. If you are having difficulty managing your finances, opt for a lender that will let you pay your debt within six months. Spreading the total amount that you must pay over three months will allow you to allot a smaller amount for your monthly amortisation.
Go For Unsecured Loan
Look for lenders that offer an unsecured loan. Offering your property as collateral is risky. The lender could seize your house or car that you used to secure the loan. You can easily find lending companies that offer significant loan amount without the need for collateral.
Check for Hidden Fees
Some lending companies charge early repayment fees if you decide to pay back your loan before the end of the term. There are other fees that the lender might have included in the contract, but they are not clearly stipulated.
Are you short of cash? Or is there an emergency that needs immediate payment? If you are shy to borrow money from your relatives or friends, you can always rely on taking a loan. There are thousands of lenders in the UK that offer different types of loans, and you can choose which one suits best for your situation and need. If you own a car or any vehicle, then, you can quickly get the funds that you badly need. Visit the nearest logbook lender, and he will be happy to lend you money with your vehicle as collateral.
When you apply for a logbook loan, the lender will ask for the registration of your vehicle as collateral. The registration document is proof that you own the car, with the understanding that if you cannot repay the loan in full on the date that you and the lender stipulated in the loan contract, the lender can sell your vehicle to get payment for the loan. To prevent losing your car, make sure to take out a loan that you can pay back quickly. The term of a logbook loan is usually from six months to 36 months. You can opt for a 36-month repayment plan so that you will have plenty of time to settle your debt. Spreading into 36 months, the total amount that you have to pay back will result in affordable monthly amortisation. Here are some reasons why many UK residents opt to take a logbook loan:
Almost all people in the UK own a car or other types of vehicle. If one owns a car, he can take a loan quickly. Your vehicle serves as a guarantor for the loan, and it is far easier than asking a relative or friend to back up a loan. You do not have to plead for help because you can do whatever you want with your car.
No Credit Score Required
Most lenders refer to the records of a credit reference agency to check your credit rating or score. Your score will show whether you are worthy enough to get the loan. If you have a low credit score, lending companies and financing institutions consider it risky to give you a loan. It is sad to note that most UK residents have low credit scores or do not have any credit history at all. However, because you have secured your logbook loan with your car, the lending company would not require a good credit score. They can quickly sell your car if you cannot pay back your loan.
You Continue Using Your Car
You can still drive your car even if you have borrowed against it. The lender will only keep the vehicle registration. In case you pail to pay back what you borrowed against your car, the lender can quickly sell the vehicle because he has the document, which serves as proof of ownership. Even if you have borrowed funds against your car, you can continue driving it.
You Can Repay the Loan Early
Many logbook lenders agree to let you repay your loan early. Even if you opted for a 36-month repayment period, you could pay back what you owed after six months or 12 months. However, if you are looking forward to early repayment, find a lender that will not charge you an early repayment fee.
Once you have presented the registration of your vehicle and signed the loan contract, the lending company will release the funds immediately. You do not have to wait for several days or weeks to get the funds for an emergency.
In recent years, payday loan lenders have been getting negative feedback about their excessive interest rate and other unfair lending practices. For example, payday loans do not conduct a credit check on borrowers, which makes some clients doubtful. However, not all payday loan lenders are as bad as what the media or some people say about them. There are still many lenders that observe government lending rules, and you can easily find one if you do your research well. Look for an online payday loan lender that has a good track record despite their no credit check rule.
All lending companies must consider the credit history of borrowers or the lending regulators will accuse them of violating the law. Payday loan lenders do conduct a credit check, which they call a soft credit check”. These companies would take a look at the information in your credit history that they will use to decide if they would grant you a loan or not. A soft credit check will not leave any traces of the enquiry for other companies to see so that it cannot affect your credit rating. A no credit check payday loan also has the following benefits:
Available For Everyone
One of the reasons that many people cannot take a loan is their low or bad credit rating. Three credit reference agencies in the UK collect data regarding loans or credits of all borrowers in the UK. A lender can check your records on the website of Experian, Equifax, or TransUnion or other reliable credit reference bureaus. No credit payday loan lenders do this; however, they do not use the information they found to make decisions regarding loan approval or rejection. Instead, these lending companies focus on whether you can pay back your loan or not.
With the information aside from your credit histories such as your job and your monthly income, lenders that offer no credit check payday loan can decide to accept or reject your loan application. In most cases, these lenders approve the application of borrowers.
Round-The-Clock Loan Application
Applying for an online payday loan is always convenient because you can do it online at any time of the day or night. As long as you have access to the internet, you can visit a lender’s website, complete the application form, and click the submit button. However, do not apply to the first payday lender that you find.
Many lending companies offer a no credit check payday loan. Always read the terms and conditions of the loan. Before choosing one, check several lenders and compare the deals that they offer. Take note of the maximum amount that you can borrow, the interest rate, the number of payments that you must make, and other terms and conditions regarding the loan. Apply only when you are sure that you can easily afford to pay back the loan and the interest. Once the lender approves your loan, you can expect to receive the funds in your bank account in less than an hour.
Convenient Application Process
When it comes to convenience, nothing can beat taking an online loan. You can apply from the comfort of your home instead of going to the lending company’s office to process your loan application personally. You can submit your application and other necessary documents through the internet. The moment someone in the lending company receives it, the lender will check your application, approve it, and release the funds. All these steps could happen within a few hours after the receipt of your application. The lending company will notify you when the money is in your bank account already, and you can withdraw it anytime you need it.
As the cost of living slowly increases, more and more individuals are becoming dependent on small loans that they use to pay for anything from rent to groceries. Currently, the most popular way to quickly borrow moderate amounts of money is to use a credit card. These offer several advantages, including the fact that the borrower does not have to wait in line or fill out paperwork to borrow money. Furthermore, most stores allow their clients to pay for products and services using these and some even offer rewards.
Unfortunately, credit cards are also extremely dangerous, especially for those who have the habit of overspending. Unlike debit cards which can only be used until the money in the owner’s account is used up, at no additional cost to the owner, credit cards come with high-interest rates. Depending on the lender, the credit card interest rate can be so high that the cost of the debt alone would be difficult to pay in due time.
Why Are Credit Cards Dangerous?
Credit cards are not dangerous by themselves. They can be great tools for those who have to pay for emergency expenses such as medical procedures or house repairs. However, the ease with which individuals can use them makes credit cards financially addictive. Lenders usually place relatively high limits on the cards and even higher interest rates.
While it might be no problem for individuals who use them sparingly or can repay the debt by the end of the month, others can quickly lose control of the situation. There is an increasing number of individuals who use credit cards on a weekly or even daily basis, only to end up unable to repay the borrowed money on time. It often happens that they cannot repay the debt and continue to use the card until they reach its limit. Not repaying the debt on time will damage an individual’s credit rating, which will also be affected by his credit utilisation ratio.
The Advantages of Online Lending Platforms
This having been said, online lending platforms are great alternatives for those who find themselves requiring several short-term loans to get through the month. While they do come with the same high-interest rates as credit cards, most online microloans are not reported to credit registers. This means that the debt will not affect one’s credit score.
Online microloans can be applied for using the websites of the lenders, P2P platforms, or mobile apps, each with different pros and cons:
P2P Platforms – P2P platforms are suited for individuals who need larger amounts of money (up to £3000-£4000). They have relatively low-interest rates when compared to other online lending services, but it can take up to one week for the money to reach the borrower;
Lending Websites – Lending websites function similarly to banks. They offer various type of loans, along with microcredits that are received in under 24 hours;
Mobile Apps – These allow users to borrow even a few pounds at a time. The fact that they are installed on smartphones makes them easy to set up notifications for when you need to repay the money. Devices with NFC readers can even be used as credit cards. Hover them above a POS as you would a regular card, and the transaction takes place;
When Is It Best to Make the Transition?
Cancelling your credit cards is usually best done as soon as you manage to pay all of them off. If you have a clean slate, financially, you will be able to make the transition without any side effects. However, it is best to keep one credit card and use it every couple of months, for small purchases. This will allow you to continue building up your credit history and increase your credit score for future loans.
Banks and other private lenders are constantly coming out with new products that are designed to be accessible to individuals who either have low credit scores or who have an insufficient credit history. The most popular of these is the co-signed loan.
This type of loan is for all intents and purposes. It is a regular loan that must be signed by an additional individual other than the borrower. Through this additional signature, borrowers can use the co-signers’ credit rating to get lower interest rates and more money. However,
What Kind of Loans Can Be Co-signed?
Both secured as well as unsecured loans can be co-signed. If an individual co-signs a secured loan, he will have to put up either a portion of the collateral or guarantee it entirely. Individuals who have low credit scores and need a large amount of money, without having anything to secure the loan against, may get co-signers to offer the collateral.
The most popular type of co-signed loan is a personal loan. However, lenders may also offer home equity loans and even lines of credit or HELOCs. Regardless of the type of loan, the co-signer is assigned part of the legal responsibility for the debt, or all of it, depending on the terms and conditions offered by the lender.
Who Can Co-sign a Loan?
There are no restrictions when it comes to who can co-sign loans; however, ideally, they should be individuals that have a good financial track record and a high credit rating. Furthermore, due to the nature of co-signed loans, the individuals are often family members or people who are closely related to the borrower.
It is important to mention that there are some limitations. However, these have to do with the credit rating of the co-signer, not the loan itself. For example, if a borrower asks a family member to co-sign his loan, then the deal will be marked on both of their financial records as an outstanding debt.
In other words, it will temporarily reduce the credit scores of both the borrower and the co-signer. In some cases, the co-signers’ credit score may be reduced by his debt to such a degree that the bank will not consider him eligible.
Alternatively, if the co-signer tries to borrow money for himself after co-signing a loan, he may find that the lender will offer him less advantageous terms and conditions.
The Advantages of Co-signed Loans for Those with Low Credit Scores
Having your loan co-signer if you’ve got a poor credit rating has several advantages:
· The lender is more likely to approve co-signed loans
If the person that co-signs the loan has a great credit score, your loan request will have a greater chance of being approved, regardless of your rating. This can be invaluable for those who have applied for a loan earlier, but have been turned down by the lenders.
· Co-signed loans have better terms
Most lenders tweak their terms and conditions depending on the credit score of the co-signer. If the borrower has a low credit score but has a co-signer that has had a good financial track record, the lender will offer a lower interest rate. In some cases, lenders may also request less collateral.
· Take out multiple loans at once
Lastly, getting a co-signed loan may enable you to take out multiple loans. Every time an individual borrows money, his credit score will be reduced as a result of the debt. However, having a co-signer can mitigate this effect and allow you to get additional loans.
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