3 do’s of Short-term Loans

Millions of Brits take out short-term loans without a guarantor every year. When used responsibly, they can prove to be an important tool for people who have found themselves short of cash to pay for something urgent and essential which they currently don’t have - sufficient in their savings account to meet.

As with all financial products though, you should do your due diligence. Due diligence means- doing the maximum amount of investigating and questioning you can into a loan so, you make sure you get the deal that’s right for you.

What is a short-term loan?

Short-term personal loans are normally used to cover emergency conditions like your car breaking down, funeral expenses, and unexpected bills. You can get an immediate decision (usually within a few minutes) on most short-term loan applications and, if you’re accepted, the money can be in your account within an hour. The loan amount varies between £100 and £2,500 with a repayment term of 2 to12 months.

With hundreds of lenders out there wanting to count you as their next shopper, Loan Princess has compiled the top three do’s on finding the right short-term loan for you, which suits your lifestyle and your circumstances.

3 do’s of short-term loans

Do make sure you can afford the repayments

Short-term loans are taken out by people to cover emergencies- when something should resolve straight away, but people don’t have the spare cash to compensate it there and then.

The fact- you’ve got to pay an unexpected bill is stressful enough, and the last thing a borrower should do is take out a loan without estimating the financial distress it can cause.

However, a short-term loan is a convenient credit product that supports you to fulfil your financial obligations.

Do make sure the lender is FCA registered

One of the most tightly regulated economic markets in the UK is the short-term credit industry. A lender or broker has high difficulty in gaining a licence. They can only lease cash under rigorous guidelines.

Brokers don't give the cash to you, but they offer lenders who can meet your demands. They link you to lenders who can even provide short-term loans for people on benefits. It enables people to gain more support for their financial needs.

Do you really need the loan?

Last and certainly not the least, consider whether or not you need a loan. If it's a vehicle breakdown — but you don't need the car to get to work or bring the children to school — it's apparently better to wait for your next salary to arrive and get it done.

Could you borrow the cash from your family and friends?
Could you ask the bank to continue your overdraft tentatively to fulfil this plan?

Taking out a loan should always be the last choice, and before applying for a short-term loan, we would highly suggest that you consider all other feasibility. You can apply for it if you have crossed every other avenue and you believe credit is the correct resolution for your financial troubles.

In addition to taking care of all these points, a copy of your credit report is essential to you in advance. It enables you to understand your present condition and can determine the effect on your report of every financial move.