Things To Consider Before Taking Out A Short Term Loan

As we go through life, we are going to be hit with a number of unexpected surprises, some of which will affect our bank balance. In the past, we were told that the common route was to pay for everything out of our own pocket and try to avoid taking any credit or loans to support you during the difficult times. However, times have changed and short term loans are becoming a popular tool for people experiencing an emergency situation. If your car suddenly breaks down or your boiler stops working unexpectedly and you find yourself with no options to pay for the outgoings, a short term loan can be an important asset to keep you on top of your money troubles. However, it is always advised that when taking out a short term loan you take out only what you need and think realistically about how long it will take to pay back. You will have clear understanding in regards to the structure of your repayment with our online loan calculator, so by being responsible with your lending, there shouldn’t be any troubles.

However, when taking out a short term loan, there are few things you must consider:

Interest rates

Always take into account the interest rates of your loan. You need to have a firm understanding as to what you are paying back so you are not faced with any surprises when it comes to the repayment. All different short term loan companies will offer different interest rates and all are very competitive. We offer a respective 1265% APR and we show that to you clearly and simply, which is what you should see when taking out a short term loan. So, no matter which lender you use, always double check the given information. Any FCA regulated lender will have a cap of 0.8% daily interest so make sure that you only borrow from a regulated lender.

Length of the Loan

When taking out a loan, you will always know how long the loan repayment will be. It is discussed and agreed upon before actually taking out the loan, but what you must consider is how long you want it for. This is where the responsibility comes into contention. Think sensibly about how soon you can afford to pay it back – the earlier the better. Some lenders, like Wizzcash, will even let you pay back your loan before the agreed time without a fee so be smart to keep your interest down.

Reasons For The Loan

Always take into account why you need this loan. Can you live without it or do you really need it? Never take out a short term loan for any unnecessary spending. Short term loans are designed to help you with emergency expenses, so spending them frivolously might result in some unnecessary debt. We understand that, at times, life can get rather difficult and towards the latter stages of the month you might not have money to spare, so a short term loan is there to help you make your way until pay day. For additional information, check out this infographic which will advise you on how to use a loan wisely.

Generic advice is not a service regulated by the Financial Conduct Authority.