Financial stress can have an impact on your life in many ways and it can become difficult to manage. But this is where short-term loans come in.
This type of finance offers quick access to funds in an emergency, so if you’re faced with an unexpected bill that your income can’t stretch to cover, short-term loans can offer a quick solution to ease your financial difficulty. Read on to find out more about these loans below.
Short-term loans: An Overview
When you need access to finance quickly, a short-term loan could be an option to explore. These loans tend to offer amounts up to around £1500 depending on your lender and come with a repayment period of 6-9 months.
This short-term finance option can be used to help you deal with an unexpected bill that your budget may not account for, or an emergency expense, like urgent home repairs, or vet bills.
These loans are typically offered by online lenders, with an easy application process and fast approvals so you can benefit from cash when you need it most. Below, we’ll take a closer look at how short-term loans can ease your financial stress.
Quick Access To Funds
Short-term loan lenders can offer quick access to funds. All you have to do is fill in a quick application form online that can take as little as 5 minutes and provide a few simple documents such as proof of ID and evidence you have a monthly income.
Once your application is sent, most online lenders will make a decision within a day meaning money can be deposited into your bank as soon as possible, which is essential when dealing with time-sensitive emergencies.
Bridging Temporary Gaps
Short-term loans can be used to bridge temporary gaps in income. For example, if you’ve recently lost your job, or you’re awaiting an invoice to be paid, short-term loans allow you to pay your bills when your income will not cover the costs.
The easy and quick application process means access to cash when you need it most, allowing you to deal with essential payments, and avoid falling further into debt. Short-term loans can provide funds in a pinch and should only be used as a temporary measure.
No Collateral Necessary
Short-term loans are unsecured, which means you don’t have to worry about potentially risking valuable assets if you cannot pay the loan.
Whilst this can give you peace of mind, be aware that interest rates on short-term loans may be higher due to the fact the lender is taking more of a risk.
It’s worth weighing up whether you’d rather take out a short-term loan with no collateral and pay higher interest rates, or you’d prefer to use possessions as reassurance for your lender.
Bad Credit Options
Financial stress can be made worse if you suffer from bad credit. Having a less-than-impressive credit score makes it harder to be approved for loans that can help you in an emergency when applying through traditional lenders like banks.
This is where short-term loan lenders differ. You can apply for a short-term loan online, and lenders will base their decision on affordability – so if you produce evidence that you can afford to pay off the loan over your chosen repayment period, you’re more likely to be approved, no matter how you’ve managed your money in the past.
How To Find A Reputable Lender
If you’ve decided to take advantage of short-term loans to ease feelings of financial stress, you’ll need to find a lender to suit your needs.
It’s essential that you choose a lender that is going to take care of your best interests, as well as your finances. Here are a few tips to help you:
- Compare and review: When trying to find a reputable lender, it’s important that you don’t simply choose the first option you find. Take the time to compare and review what a few lenders have to offer to ensure you’re choosing an option that suits your financial needs and your budget.
- Prioritise customer service: Another essential aspect is customer service. Because you’re dealing with your own finances, knowing that there is help when you need it is crucial. Look for live chats and contact details that allow you to get in touch with your lender if you need it. Also look for reviews from others that have used the service to get a better idea of how they treat customers.
- Read the small print: It’s unlikely your lender is going to display all the information you need on the first page of their website, which is why it’s important to read the small print. The small print will reveal essential information that is always good to know before entering into an agreement. Be aware of hidden charges, as this may reveal predatory lending practices.