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.