If you need to borrow some money, then you will have a big choice of different loans available for you to look at. This can be really great because it means that you will be able to find the one that matches your needs the most. However, it is important to make sure that you know a lot about the different loans so that you can choose the best one for you. It can be a good idea to have a list of requirements that you have an idea of what features you need to look out for in the loans that you are comparing. You may find that you know a lot about certain types of loans such as overdrafts, credit cards and mortgages but you may be less familiar with short term loans. It can be good to make sure that you are aware of what the loans are and how they work as it will enable you to make a judgement as to whether they will be good loans for you or not.
How Much Can I Borrow?
It is important to start by finding out how much you can borrow with the short term loan. This will vary between lenders and so you will have to check with them to find out. However most short term loans will only allow you to have between £100 and £1,000. This might not seem like much but it can be safer to borrow less money. This is because you will not be tempted to spend it on things that you do not really need but just the specific sum of money that you need. By borrowing too much, you will have a larger loan to repay which can be stressful as well as expensive.
How do I Repay?
Short-term loans tend to have two ways of repaying. A payday loan will need to be repaid in a lump sum when you next get paid. This means that you will clear the whole loan really quickly but you will need to find that big chunk of money to pay it off and then make sure that you still have enough left to cover all of your other expenses. There are some instalment accounts though, where you will be able to spread the cost of the loan. These can be easier to manage but they will normally be more expensive so you have to decide whether you think that it is worth the extra money to make it easier to repay.
Can I Afford it?
It is really important to make sure that you can afford the loan that you pick. Find out how much it will cost you in full firstly. Then think about whether you think that the item you are buying with the loan is worth it considering the cost of the loan on top. Also think about your financial situation and think about whether you feel that you can afford it.
What About my Credit Score?
Many lenders will take a look at your credit score and decide whether they will let you have the money based on this. However, it can difficult for some people to get a loan at all if they are looking at this. This is where a short term loan is unique. The lender will not use the credit score and will therefore be willing to risk lending to anyone. This can be very handy for anyone that does not have a good credit score as they will not have to worry about whether they will be turned down for the loan or not.