Are Short Term Loans for Bad Credit the Best Solution for Emergencies
If you are in the situation here you need money in a hurry then you may feel that you cannot easily decide on what to do. It is very common that when we are in a state of high emotion, that making decisions is difficult. We cannot think straight and therefore it can either be hard to know what to do or we make a hasty and unwise decision. This is why it can be a good idea to either have a plan in advance just in case this happens, get someone to help make the decision or get the opinions of others before you do anything. One typical mistake that people make is that they think that there is a one size fits all solution for their problem. They feel that there is a solution that worked for others or is being shown to be the best and that is their only option. It is worth noting that there will usually be a selection of different options but you will need to make sure that you are making the right one.
How much would you like to borrow?
Representative Example: Rates from 49.9% APR to max 1333% APR. Minimum Loan Length is 1 month. Maximum Loan Length is 36 months. Representative Example: £250 borrowed for 30 days. Total amount repayable is £310.00. Interest charged is £60.00, annual interest rate of 292% (fixed). Representative 669.35% APR (variable).
About Short Term Loans
If you are considering getting a short-term loan then it is sensible to make sure that you know a lot about them and how they work first. This should then enable you to be able to make a good decision about whether they will suit your needs. We tend to all think we know a lot about cash loans for bad credit, but unless we have used several different types we might not be aware of exactly how they work. They also vary between payday lenders as well, so it is wise to make sure that you do know how they work. Below are a few questions that have been answered which might help you.
- Do I have to repay in one lump sum? – When we think of a short-term bad credit loan we will often think of a payday loan which has to all be repaid in one lump sum when we get paid. Although there are loans like this, there are now a range of different loans available. This means that you can choose between different repayment terms. Although some people will still be happy with repaying it in a lump sum, others would prefer to be able to repay it in instalments. With this options now available from many lenders, it means that repaying the loans can be a lot more manageable for many people.
- Are they only for people with bad credit? – It is not surprising that many people would assume that a short-term bad credit loan will only be for those with a bad credit record. However, although this is who they are designed for, they are available for anyone. The lenders do not pick to only lend to those with a poor credit record, but they will lend to those which have no credit problems as well. Although those with a better credit record will usually have more borrowing options, they may still be attracted to a short-term loan because they might be able to arrange it more quickly or repay it more quickly than other loans that are available to them. Therefore, do not dismiss them if you feel that you have a reasonable credit record but consider them alongside other options.
- Are they too expensive for me? – You may feel that a short-term loan for bad credit will be too expensive. It is tempting to conclude that you will end up paying more because lenders are taking more of risk as they lend to those with a poor credit record. However, lenders vary a lot in what they charge and you may be able to get a better rate than you can with some other types of loans. It is worth calculating exactly how much you will pay in fees for the loan and then compare that figure to other lenders. Then you will be able to decide whether you think they are expensive compared to other forms of lending as well as deciding whether you are happy to pay that much for the loan.
- Do they only lend tiny amounts of money? – It is easy to think that short-term lenders only lend small amounts of money. It is likely that you will have seen information which says that they only lend a few hundred pounds. Although this can be enough for some people, you might also find that it will not be enough money for you. However, short-term bad credit lenders vary and some will lend up to £5,000. This is obviously significantly higher than a few hundred pounds and therefore you will find that there will be a lot more choice with regards to short-term loans than you may have first thought.
- Will it be hard to find a good deal? – You might feel that there are not many lenders to choose from and you will be restricted by choice, meaning that it will be tricky for you to find a good deal. However, this actually is unlikely to be the case. There are now a lot of lenders in the short-term loan market and this means that it is competitive and varied. Therefore, this means that you should be able to find that there are plenty of lenders and you should be able to compare them and then find a good deal.
How to Find the Best Short Term Loans
Next you will need to think about how to find the best ones. To start with you need to think about what you want from a loan and then you can match a lender to that. So, consider what you need from the loan –
- How much you need to borrow.
- What repayments you can afford.
- How much you are prepared to pay.
- Whether you want a well-known lender.
- Good customer service.
This will be a very individual list and the ideas above are just there to give you a few ideas of the sorts of things that might be important to you. It is worth spending a bit of time considering this as even if you think it does not matter, you may find that if you accept a short-term loan offer without thinking about it, you may come to regret your decision afterwards.
Once you know what you want you then need to find a lender which is offering a loan that matches your requirements. This means that you need to find someone that has all the things that you need. It can be tricky to do this as there are so many lenders that you can choose from. You might find the whole task rather overwhelming. Not only will you have to find who the lenders are, but you will then need to check and see whether they are offering what you are looking for. In some cases, this could be easy to find out, such as whether they have a well-known name. However, if you want to calculate how much they cost or what their customer service is like then this will take a lot more investigation. It can therefore be wise to think about whether there are methods you can use which will make this process easier and quicker. There are probably several options:
- Ask people you know for recommendations – This will help you if you are looking for a lender that comes well recommended. People you know are unlikely to be biased when they are telling you about things like this. They will have your best interests at heart as well so will want to only recommend lenders that they think will be good for you. It is wise to make sure that you ask them questions about what they thought about their borrowing experience and what they thought was good or bad about it so that you can decide whether you think it will be right for you. Remember to ask them in detail what they liked and disliked about the loan and lender as they may have different things that they find important or there might be things they dislike that you actually like.
- Look at review websites – There are websites where lenders are reviewed. These can be handy as they can give you more information about each lender than you will get just from a list and you can find the information all in one place. It might let you know how much they cost and what the lenders are like and what some of the terms and conditions are which will save you having to do so much searching for this information. The list will not include all lenders though and may not have all of the information that you need, but it could be an easier place to start.
- Use a credit broker – Many people choose to use a credit broker such as Boutell instead for help with getting a loan. They will take your details and let you know which lender is willing to give you the money that you need. Using a credit broker for bad credit loans with no guarantor will make the whole application process much quicker which could be really beneficial to you.