There are many different short-term lenders and it can be quite difficult at times knowing who to choose. If you have not used them before or have not really looked into using them then it may just seem like a very confusing place. It is well worth finding out more about them. Whether you need some money now or feel that you might need some in the future, it can be a good idea to think about what sources you might get that money from. This could be form savings or you may be able to do more hours of work or things like that. However, many of us will turn to borrowing to help out. If you are considering borrowing money then it is wise to make sure that you are aware of all of your options so that you can pick the best ones for you. This means making sure that you are aware of all loans including short-term loans and which will be the best.
Types of short-term loans
There are quite a few different types of short-term loans and therefore there are different options. This can be handy because it means that you are more likely to find one that will suit your specific needs. However, in order to know which could be right for you, you will need to aware of them all. A few are described below but different lenders will have different options.
Payday loans, especially those for bad credit are probably the most well-known type of short-term loan. They will allow you to borrow a sum of money until you next get paid. You will tend to be allowed up to £1,000 although many borrowers will be offered much lower amounts. Lenders tend to want to build up trust with their borrowers and will offer them smaller amounts to start with and if they pay that back then they will offer them something bigger.
Payday loans can sometimes be tricky to repay because you have to repay all in a lump sum, but there are short-term loans where you can pay in instalments which are handily referred to as instalment loans. With these you can repay over a longer time period and this means that it can be more manageable. If the repayments are broken down into smaller chunks then this can mean that it is easier to find the money as it will not all need to be spent at once. You might also decide that you will be able to afford to borrow more money because it will be easier to repay.
If you want a really large chunk then you could consider a guarantor loan. This is a bit longer term because you borrow a more significant amount of money. You will need a guarantor who will make repayments if you cannot though.
How they work
These short-term loans have some differences compared with the more traditional loans you will see advertised by your regular bank or building society. Firstly, you will be unlikely to be familiar with the lenders and they tend to specialise in this sort of loan. The loans will also usually be quick to arrange. Some lenders will be able to get you the money within a few hours so that it can be used for emergencies. The lenders will also lend to those with a poor credit record. This means that if you cannot borrow money in a more traditional way, you will still be able to borrow through these lenders.
Which is best
Trying to work out which is best will depend on your situation. One big factor could be how much money you need as the different types of loan tend to lend different amounts of money. This can be a very important factor but you should also consider the cost of the loans. They will vary between types and so you should check the cost and think about which you think will offer the best value for money. You should also think about how well you can afford the different ways to repay as it is important that you do your best to repay as otherwise you will be charged extra money.
There is a lot to think about but it is important to make sure that you do pick the right loan for you. Not only picking between loans but also between the different lenders. You will find that there is a big difference between the different lenders with regards to the costs as well as everything else that they are offering. This means that it is a good idea to have a think about what you are actually expecting from your loan and what you want and can afford and then you will be able to match it up. You may find that what works for you best at one point in time might be different at another time.