When you’re in a tight fix financially, a short-term loan can prove to be the fastest and most practical way to access the funds you need. These types of loan don’t take long to process, no collateral is needed in the application and they are not prescriptive. The most common reasons for people to take out short-term loans include, paying for medical emergencies, making urgent purchases, commissioning repair work or paying essential bills on time.
There are certain factors every borrower should be sure to consider before taking any kind of loan.
But this is even more important when it comes to loans designed to be paid back quickly. Here, we’re pointing out the key things you need to look out for when picking a short-term loan that’s right for you. We’ll start with:
Do you really need one?
Short-term loans might provide you with instant access to cash, but this convenience comes at a price, one that is often higher than any other form of borrowing. Before you jump into applying for a loan, you should always ask yourself if it’s really the best option for your current circumstances. Making a purchase that you think is really necessary? Think about whether you really need to buy it right now, or if it’s possible for you to wait.
How much do you really need?
It’s always best to borrow an amount that is well within your means to pay back. Quick loans like this can be designed to be paid back within days or weeks. By taking much more than you need, you put yourself at greater risk should you fail to make repayments within the agreed time frame. Aim for lowest amount that you need to be sure you can comfortably pay back what you owe in good time.
Compare APR as you search
The APR is the Annual Percentage Rate. It’s essentially the amount you would be paying back if the loan were taken out for an entire year, expressed as a percentage. As you would expect, the APR on short-term loans is often significantly higher than on loans that would actually be taken out over longer periods of time. As you search for different loans from a variety of lenders, the APR is a useful indicator of a loan’s value and it should be one of the main details you keep a good eye on.
Look out for other charges & premiums
Try and go through the terms or the loan agreement with a fine brush to identify if there are any fees you might have seen when you initially found the loan. These loans are often presented differently by different lenders, but we’ll point out the main details you should be looking for:
Late or missed payment charges – Many loans will come with charges that you’ll be liable to pay if you miss the deadline for repayment or fail to pay completely. Check these out and be sure you’re aware and happy with them before you accept. Try to be realistic when thinking about the likelihood of you missing a payment deadline. You might think there’s only a slim chance of you not paying on time, but you have to prepared to pay this charge if things go wrong unexpectedly.
Processing fees – These fees can be applied to loans that are made payable to you in quick time. Most lenders will be very upfront with their processing charges, so this can be a handy way to separate the good from the bad.
Extension fee – This is the fee the lender will charge you if you need to reschedule your repayment. This is another key aspect to factor into your comparison especially if you think there’s even a remote possibility of you needing to pay a little later than expected.
Broker fees – If you are not applying for your loan directly with the lender, a broker will be involved in processing your loan. This means a brokers fee will be applied to your terms. Try to apply directly through a loan company if you want to avoid a brokers fee.
It’s always worth doing a decent amount of shopping around before settling on loan. Even if you do end up selecting one of the first solutions you found initially, it’s always good to be sure you’re doing what’s best for you!How to Choose a Short-Term Loan That is Right For You Click To Tweet
However, if you are in need, Quickle do offer small loans. Get in touch with us today. Receive money in your account with our same day loans or small loans with manageable repayment options. All you need to do to apply is complete our quick and easy online application and then send us your bank statement. For details, contact us.