With so many lenders offering short-term loans online – it is not a challenge anymore to find a loan to fix your monetary issues. We often find ourselves searching for such financial products, which may help us until our next payday. Traditional banks and mainstream financial institutions do not offer a small amount of funds for a brief period. Fortunately, there are many lenders in the United Kingdom who offer Short-term Personal Loans that you can literally use for anything. You may use the funds for repaying your credit card debts, you may use it to fix your boiler, and you may use the money to repair your car so that you reach office on time. Most of us do not bother to spend a little more time on the internet to compare the offers that are available to us. And that is how we end spending more money. The trick is to compare the loan offers from various lenders so that you can make the right decision.
In this article:
- 3 factors to consider while comparing short-term loans online
- 3 benefits of a short-term loan
- 3 ways to find the right loan for your needs
3 Factors to Consider While Comparing Short-term Loans Online
#1 Hidden Charges
Check if there are any hidden charges such as upfront fees, loan origination fees, processing or administration fee. Lenders and credit brokers who are registered by the Financial Conduct Authority (FCA) do not charge any upfront fees to their borrowers. So, if a lender asks you to pay them any type of fees before you receive your loan – you may consider it as a sign of a probable scam. Hence, do thorough research before you legally enter into a deal.
#2 Annual Percentage Rate (APR)
This is one of the most important factors that you must take into consideration while comparing short-term loans. We often check the rate of interest that we are being offered and ignore the APR. An interest rate is levied on the principal amount while an APR indicates the overall cost of borrowing. Therefore, you should always compare loans on the basis of the APRs that you are offered by the lenders.
#3 Monthly Repayment Amount
You must be able to afford the monthly repayment amount because if you fall behind – it will harm your credit score. A credit score is an important component of your finance management that reflects your relationship with payments and credits. Different lenders may quote different monthly repayments. Choose the one that you are comfortable with.
3 Benefits of a Short-term Loan
#1 Readily Available
Sometimes we need funds immediately for an emergency. Short-term loans are easily available online and some lenders even offer same-day personal loans. That means if your loan application is approved, you may get the money on the very same day that you can possibly utilise. Also, the process of application is smooth and hassle-free for a seamless borrowing experience.
#2 Boosts Credit Score
If you make all the repayments on time and in full – your credit score will be improved. It will not happen overnight as improving a credit score is a gradual process. If you have a poor credit score and you are making timely payments, then your credit score will get a boost.
#3 Available for a Brief Period
Short-term loans are available for a brief period. You have to make the repayments within 12 months. That is the reason many lenders and credit brokers offer stating “12 Month Short-term Loans in the UK”. Lenders typically offer you to borrow an amount as low as £100 and as high as £1,000. The amount that you may receive depends on your credit history, monthly income, and expenses.
3 Ways to Find the Right Loan for Your Needs
#1 Evaluate your Need
This is the first and most important step when you are considering to borrow a loan. You should know how much amount you need and how long you may take to repay it. That will help you in assessing your affordability. Also, determine how you will repay the loan keeping in mind the regular expenses that you cannot avoid.
#2 Find the Lender/Credit Broker
You will find a plethora of options when searching for lenders and credit brokers in the United Kingdom who offer personal loans. However, you should always deal with them only if they’re registered by the Financial Conduct Authority.
#3 Choose the Product
Once you have finalised the lender or credit introducer – visit their website to browse the products they are offering. There are lenders who offer a wide range of personal loans such as wedding loans, home improvement loans, holiday loans. All these loans have the same features, however, they are advertised under specific labels for your convenience to select it. Fill up the application form and submit it online with all the details that were asked in the form.
The rest will be done by the lender. They have to conduct a credit check on your profile to assess your creditworthiness and affordability. Their decision will be displayed on the screen within a few minutes so that you do not have wait for long.
The Bottom Line
Comparing the products on a price comparison website helps you in saving a great deal of time, effort, and money. Loan Broker is an FCA authorised credit broker that has a panel of lenders who are registered by the financial regulator. The lenders associated with us conduct a soft credit check to offer initial quotes and to assess your creditworthiness. A soft credit check (also termed as soft pull) doesn’t leave any footprint on your record and hence, doesn’t impact your credit score. However, a hard credit check is conducted by the lenders before giving their final approval to your loan application. We do not charge any upfront fees to our borrowers.
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