Getting a loan of some kind is a thing that most people in the UK will need to do at one time or another. In fact, the average UK citizen has nearly 60 thousand pounds worth of debt. Many of these people have student loans, mortgages or vehicle loans, but that isn’t always the case.
While the aforementioned types of loans can often be for tens of thousands of dollars and have multi-year terms, there are also short term loans. These loans are great for those times where you need a smaller amount of money in a short period of time. This could be to cover an accident, for unexpected travel, medical expenses or other large purchases.
But how do you know which short term loan is right for you? With so many different lenders out there (including quality online lenders like BingoLoans), you need to make sure you find the right one. This article aims to help you out, as we’ll look at some of the most important short term loan factors to look at when comparing one loan to another.
The Interest Rate
Of course, one of the first things to look at is the interest rate that accompanies the loan. A higher interest rate will mean that a loan is more expensive over the entire term. As a result, you want to try and get a short term loan with the lowest interest rate possible. Different lenders will often have different rates, so be sure to shop around.
When looking for a short term loan, it is normal to encounter higher interest rates than long term loans. This might look bad but isn’t. A higher interest rate over the lifetime of a short term loan will still be much less than a lower interest rate over a multi-year loan.
The Minimum or Maximum You Can Borrow
Everyone has different needs out of a short term loan. Some might just need $100 to cover their bills for the next week, while others might need a few hundred for medical bills or other emergencies. The short term loan needs of each person vary, so a lender needs to offer customized funding options.
However, it is still important to find out the minimum or maximum amounts that a lender will lend. Not every lender will offer the same minimum and maximum amount. For example, if you need $2,000, some lenders may not allow people to borrow that much. Same goes for those people that might only need $100. Be sure to ask each lender their minimum and maximums before agreeing to work with them.
Fees and Charges
While fees and charges are a normal part of borrowing, some lenders may have more than others. Because of this, you need to either ask about fees or read the fine print on all contracts. The last thing you want is to get a loan that is riddled with expensive fees and charges that you didn’t know about.
Of course, be sure to watch out for lenders that try to charge you upfront fees or a bunch of fees and charges that don’t make sense. Reports of loan scams have been on the rise recently, so you can never be too careful. If something makes you uneasy, perhaps it is a good idea to move on from it.
Hopefully, this article helped you learn more about what to look for when comparing short term loans. Not every short term loan is created equally, so be sure to spend time finding one that works for you.