Short Term Loans: A Guide to All Your Options
The short-term loans often referred to as the short high-cost loan is the one paid at a period of less than a year and at a representative APR rate over 99.9 percent. Previously, these types of loans were commonly called the payday loans mainly because they were considered to be repaid on the coming payday itself. However, there is an extension for this loan as per today’s rule and lenders require this amount to be repaid anytime between a 12 months gap.
Safety of taking an ST loan
Secure your dealings by borrowing only from the loan providers who are regulated by the Financial Conduct Authority. On the other side, there exist certain unauthorized lenders who charge you heavily. So, search on the FCA register before actually proceeding to apply for loans.
Is there a limit on payday loans?
It is purely based on your choice of taking loans. Whenever you apply for one, your balance will be checked immediately and if the lender finds out that you are unable to afford the money repay, then your application will be declined that finally shows up on your credit file. If you continue applying for more at a time, then you could end in a poor credit rating.
Alternatively, there is a scheme for responsible lending which is applicable only if are fit enough to make a payback.
Do not fall for no credit check ads
Beware of such companies and understand the fact that they stand only as the brokers and are not the real lenders. They may not check your credits but once you are connected to a lender, the normal procedures continue but you might have to pay double in this indirect process.
What is the approval time of these loans?
Mostly, if the information provided by you on the application sheet is true and there occurs no confusion, then you will be instantly sanctioned with the loan. You need to produce the fair copy of your payslip, employee details and insurance number to complete the procedure.
How to pick the right loan?
A wise step to consider while opting for the short-term loan is by entering the total amount you can afford to repay on the short-term comparison tables. The website https://www.lainaa-heti.fi/lyhytaikainen-laina/ provides such a comparison table where you can enter the amount comfortable for paying back.
Apart from this, it is also advisable to consider the following elements like
- Possible monthly payments you can make to the lender.
- Know the representative APR, which is expressed as the sum of the interest rate and the average value the candidate will actually pay to the lender. If in case, the interest goes beyond 100 percent, then the respective loan is categorized as the high-cost credit which comes with the security of consumer protection and chances of offering a rate lower than representative APR also exists.
- Always look out for the customer reviews to know the fair dealings of the lender.
- Confirm the general facts on loan term and amount.
- Have the knowledge on the eligibility criteria and also, if there is a repayment holiday or such features that can add to your benefit of taking such loans.
- Also, try to understand the fee structure if any on arranging the loans or so.
How to actually pay back the loans?
Once you accept the terms and conditions of the loan, then it means you need to make a monthly or yearly payback. But if you are struggling and nearly fail to make the payments, then the lender can charge directly on your bank account via debit card service on the repayment day. If you try to cancel this, it can further impact your credit file. So, it is worth talking to a debt advice service to deal with your bad credit situation.
Eligibility for a short-term loan?
The set of ruling factors that might be considered by the lender for accepting your loan application is regarded as the acceptance criteria. Each lender has a distinct acceptance criterion and so check on it and compare with your preferences before you actually give it a hit. Generally, people above the age of 18 can apply for these short-term loans.