You may feel that short term loans are just not for you. However, it is a good idea to think about the fact that you should not eliminate options if you do not know what they are. If you have investigated them and then decided that they are not for you at this point in time, then that is fair enough. It is important though, to remember that circumstances do change and you never know whether they might be the right thing for you in the future. Also if you do not know very much about them, then you should not eliminate them form your options until you find out more.
What are Short-Term Loans?
A short-term loan is a bit different to most other loans that you are likely to have heard of. They have a few main differences that it is worth being aware of. Firstly, you can borrow between £1000 and £1,000 which is quite a low amount. Most traditional loans will be for a lot more money. This can be handy, but it can also mean that you are tempted to borrow and spend a lot more money than you actually need and this can mean that you end up paying lots of interest and you could even end up struggling to repay the loan which could last a long time.
The loans came about due to lenders recognising that there was a need for people who could not borrow money due to a poor credit rating to have a way of borrowing money in an emergency. This means that the loans are very quick to arrange, sometimes only taking a few hours and often are available outside of normal banking hours. The loans are also available to people even if they have a poor credit rating and so it means that more people are able to borrow.
When are they Useful?
There are some very specific circumstances when these loans could be useful and it is worth being aware of these in case you happen to be in that situation at some point. If you have a poor credit record and you need to borrow money then these loans are one of the very few options that you have. Conventional lenders will tend to just reject any borrowers that have a poor credit rating and if their credit rating in only just good enough they will tend to charge them high amounts of interest. This means that those with a poor credit rating could find that they will be extremely useful for them.
The loans can also be organised really quickly. This means that it is possible to get money within a few hours. So, if anyone needs money in an emergency then these loans could be extremely useful for them. Some lenders will be able to provide the money quicker than others so it is worth checking the details of this to make sure that the lender that you are considering will be able to do that for you. Some will also be able to provide money outside of working hours, perhaps overnight or at weekends. This is something that other lenders will not do and so it means that if you are in the situation where you need money really quickly and they are not open, then you could find that a short term lender will be able to help you.
If you want to borrow money for a really short amount of time these loans could be useful. You will have to repay the whole loan normally within a few weeks and this means that there is no chance that the loan will go on for too long. Therefore, if you want something that you can guarantee will not last a long time, then this type of loan could suit you.