Is A Short Term Loan Really Your Best Option?

In times of financial trouble and emergencies, many individuals will automatically turn to short term loans. Now, despite these kinds of loans being there to help and provide for those who are experiencing financial problems, perhaps they’re not really the best option for everyone. In the UK, borrowing a payday or short term loan is a very popular immediate answer that people can apply for if needed. Whether you are experiencing a broken boiler or an unexpected bill, a short term loan will always be available, even if you have bad credit. Bad credit loans are only available depending on the lender you choose to borrow from, for example, BingoLoans. However, despite offering fast deposits and straightforward repayment plans, there is high speculation about how beneficial these loans actually are and what downsides come with them.

Why Should You Consider A Short Term Loan?

Before diving into your application as soon as you realise you’re in need of extra cash, here are some of the main reasons you should consider a short term loan.

1. They’re Unsecured

Unlike many other loans in the UK, short term loans are often unsecured. This means that you do not have to provide any assets to be able to borrow them. Due to their smaller amounts and longer repayment plans, lenders often keep this kind of loan unsecured, making it more accessible to everyone. Instead of assets, the acceptance is based on other aspects, like your credit score.

2. Easy Acceptance and Fewer Requirements

As previously mentioned, obtaining a short term loan can be quite easy. In fact, as there are no assets involved, acceptance is entirely based on how well you fit the specified requirements. These often include being over a certain age, having a steady income, and having a high credit score. Some lenders will offer bad credit loans to ensure that everybody has the opportunity to borrow if needed. As the number of requirements is relatively small, it’s common for most people to be able to access some sort of money when applying for a short term loan.

3. Plenty of Options

As the financial industry is constantly growing, there are many lenders and brokers for individuals to choose from when applying for a loan. If your credit score is strong and the likelihood of your acceptance is high, finding and applying to a lender directly is a simple task. Usually, applicants will have to fill out an easy online form. However, if your credit score is on the lower side, using a broker might be a better alternative to increase your chances of getting the loan and give you plenty of options.

What Are The Alternative Options?

Short term loans can be a dangerous option when it comes to your finances. Although they are seen as helpful and beneficial, if used incorrectly, they can soon become extremely damaging. Borrowing for the wrong reasons and borrowing more than you can afford to pay back can quickly lead to an accumulation of debt and more severe legal consequences. However, when used correctly, the chances of these outcomes are low. Before applying for any kind of loan, individuals should evaluate their own personal finances to ensure they can afford the necessary repayments to avoid any negative complications. However, we advise you to search for other options as opposed to a loan before applying. This way, you are minimising your chances of any further financial challenges. Here are a few examples.

1. Savings

Although not everybody has accessible money saved in case of emergencies, for those who do, this is the perfect opportunity to use it. Using the money you have available means that you will not have to pay any interest on a loan or other financial service. Therefore, although your balance may decrease, you will be saving money in the long run. This option is not available to everybody as 23% of Brits have no savings at all, therefore meaning they will have to explore other routes.

2. Borrowing From Friends

Although this can be a complicated and awkward conversation to have, borrowing from family and friends is also one of the most convenient options available to pay off any debts or sums of money that need urgent attention. However, before you do so, we advise putting rules in place to ensure that your relationship isn’t at risk.