Taking out a mortgage might not be on your agenda, but borrowing small amounts of money for the short term can sometimes feel just as difficult.
Different types of loans have different terms, and finding the best deal isn’t always easy. So if you’re looking for a short term loan, check out this guide for help finding a loan that’s right for you.
How much do you Need?
Before looking for a loan, you should have exactly the amount you need to borrow in mind. Never be tempted to bump it up for the sake of it, as you will end up paying more interest. Instead, only borrow what you need.
Borrowing less than £1,000
If you intend to borrow only a small amount of money for a short time, then you should bear in mind that the shorter the loan term, the more you’re likely to pay. This is especially true if you choose a payday lender, some of whom charge eye watering interest rates of up to 4000%.
If you’re borrowing less than £1,000 and using a payday lender, remember that a common trick used by a lot of payday lenders is to confuse customers with hidden fees and APR rates which don’t reflect the true cost. APR is normally only a good measure of how much a loan costs when a loan is for longer than year, as APR is an ANNUAL rate.
Instead, to work out how much a loan costs, you should look at the interest rates charged on a daily, not yearly. For a loan that isn’t going to confuse you, try Piggy Bank Loans who give their customers clear information on the true cost of a loan, day by day. Click here for more information.
Beware Third Party Lenders
Although there are now more online lenders than ever before to choose from, be very cautious about who you are actually dealing with. Some lenders are not always what they seem as they are in fact not actually lenders at all. Confused? Well, that’s the idea. These companies appear to be offering you a loan, but in reality, they are charging fees for referring you to lenders who won’t necessarily lend, and taking their fee regardless of whether or not you actually get a loan. Always avoid so-called lenders who charge upfront fees before having provided any service, and look very carefully at the terms and conditions to be sure you understand who exactly will be issuing any loan.
Price Comparison Websites
Price comparison websites don’t always offer the best deals, as it depends which companies they are linked with. So if you’re looking for a loan, be sure to check more than one site, as not all price comparison websites are made equal.
Finally, before jumping in head first and taking out a loan, always be sure you can afford it. Repayments must be kept up and loans paid off, otherwise you’ll incur serious debts and damage your credit record. If you have poor credit, loans will be even more expensive for you, so tread with care!
Harry Price is a entrepreneur and bachelor that enjoys the freedom of his newly acclaimed entrepreneurship. He has always had a hard time living in one place for more than a couple years and is liking his freedom to travel and move to different countries.