Life can be difficult, and sometimes unplanned expenses can come up at times where you are not financially prepared. This is where short term loans come in, their core use being for people who need money fast to resolve an emergency. If the expense can wait and doesn’t have to be fixed straight away, it is best to wait until you have some extra cash yourself rather than go for a lender. Wondering if a short term loan is the right option for you? We’ve teamed up with cashasap.co.uk to bring you this quick guide on short term loans.
What Are Short Term Loans?
Short term loans are a form of loan in which you agree to pay the lender back within a short period of time. They also have a fast application process and turn around, so you will have cash with you quickly, usually the same day. Due to their fast nature, short term loans typically have a high interest rate meaning that you will pay back a considerable amount more than you take out. Short term loans should only be used for emergency financial situations. For example, when you need to fix something urgently but do not have the funds to pay for it as it occurred unexpectedly. You should also always be positive you’ll be able to pay back the loan and the interest fully when the payment is due to avoid getting yourself into further debt. There are two variations of short term loans: payday and installment. Payday loans are when you take out a loan and agree to pay it back in one installment on your next payday. Installment loans, however, are paid off in a series of instalments. This is still over a short period of time, and the interest rate is usually higher than payday loans.
Direct Lenders vs Brokers
You can get a short term loan from either a direct lender or broker. A direct lender is someone that directly lends you the money, whereas a broker is a third party that doesn’t lend you the money but works with the lenders. For example, a price comparison website would be considered a broker due to the fact that they work with multiple lenders to find you the best deal.
Should I Get a Short Term Loan?
There are benefits of short term loans, particularly when you are in need of fast cash, but you should always be sure to only apply for one when necessary. If you are unsure whether or not you’ll be able to pay the loan back in the time frame, then it would be a better choice to seek financial advice. Getting a short term loan when you may not be able to pay the amount and interest back can be really dangerous and could lead to severe debt.
If you’re looking for a short term loan, or want more information, then cashasap.co.uk is an FCA regulated and authorised direct lender. Head over to their website for everything you need to know about short term loans.
