Emergency Funds

Why Take Short Term Loan for Your Emergency Needs?

There are times when an emergency prop up that requires cash. If you have no savings, you could find yourself in a predicament. Borrowing from relatives and friends could be your first option, but with everyone affected by inflation, you might not get help even if there are people that want to help you. If you need cash within the day, taking a loan from a bank could take a day or two to process. Perhaps, taking a short term loan is the answer to your problem.

Here are some reasons to take short term loans for your emergency needs:         

You Can Apply for Online

Applying for a short term loan is easy because you do not have to hand in your application personally. You can browse the internet for lending companies that can lend you money payable in less than a year.

Before deciding which lending company to apply, check several offers first to find the best deal in terms of annual percentage rate and repayment terms and conditions. Choose a lender that charges the lowest interest rate and offers the most comfortable repayment options. Fill up the application form on the website by providing all the information that the lending company requires. Check if you have not missed and anything before hitting the submit button. Lending companies reject forms that are incomplete or not filled up correctly.

Fast Approval and Release

Most online lenders approve and release the funds on the same date of application. Urgent expenses such as repair of a leaking roof that you discovered when it rained the night or purchase of medicines for an unexpected hospitalisation could not wait for a few days. You must have the cash to pay for them.

By taking a short term loan, you can get the funds you need a few hours after the lender has approved your mortgage. You would receive the funds through your bank, and you can use the money immediately. When you borrow from banks and other traditional lending companies, you must wait for a few days to have the cash, which can be too late for some emergencies.

No Long Time Commitment

Thinking about debt can be stressful, especially when you are experiencing financial difficulties. Borrowing money for a short period would also mean you would only have a few months of worrying. If you are the kind of person that does not want to worry about debts for many years, short term loan will suit you well. The repayment period is short, and the lender would charge you less for the amount that you borrowed. Aside from paying less interest, you could look forward to being debt-free after a few months instead of many years.

Credit Score Is Not a Requirement

Lending companies that lend money for a short time are not strict when it comes to credit history. Even if you have a poor credit rating or no credit score at all, the lending company will approve your loan as long as you can pay based on the information that you provided in your loan application. One indicator of your ability to pay what you borrowed is your net income. You can arrive at this by subtracting your expenses from your earnings. Taking a loan when what you earn each month is not enough for your basic needs might not be wise.

For your urgent needs that require only small amounts, a short term loan is a good option. As long as you pay your debt promptly until you have paid up in full, you could avoid getting into a debt cycle. When you borrow again, you will enjoy a better deal and a more significant loan amount.

Doorstep Loans

5 Things You Should Know about Doorstep Loans

Finding yourself in need of cash to pay an overdue utility bill, urgent car repair, or medical bills can put you in a bad situation. Borrowing money from relatives and friends can help, but when these people are financially struggling like you, they might not be able to help. Why not apply for a doorstep loan? Many UK residents from the weak sector turn to this type of lending during difficult times. Since it is a loan, the lender charges interest. Nevertheless, doorstep loan continues to be popular among those who are in dire need.

Here are some essential things that you should know about a doorstep loan in the UK:

  1. Doorstep Loan Defined

A doorstep loan is a type of short term borrowing where local agents personally bring you the funds and collect a weekly or biweekly payment for the loan. Some people call this type of loan home credit because all borrowers receive funds at their homes and make payments through collectors that visit their house to collect your dues.

Doorstep lenders have the authority of the Financial Conduct Authority (FCA) to operate as a lending entity. To make sure that you are borrowing from a legitimate lender, always ask for the authorisation or check the inclusion of the company name at the FCA website.

  • Target Borrowers of Doorstep Loan

Doorstep loan may have a high-interest rate as it targets people that have a poor credit history, have meagre income, and those that do not have a bank account. Most lending companies release the funds through the borrower’s bank account. If you do not use the services of a bank, you can’t take a loan because there is no way of releasing the amount that you borrow.

Since doorstep loan or home credit brings the cash to you directly and collects payments from your house, opening a bank account to take the loan is unnecessary. You do not have to take a trip to the bank, allowing you to save time, gas, or fare.

  • Doorstep Loan Is Convenient

What makes doorstep loan highly accessible is the convenient way of taking a loan. Some lenders allow borrowers to submit their application online. After reviewing the application form, the company sends a representative to the borrower’s home address to explain the details to you. The agents would answer your questions regarding the loan and how you must pay it back. Once you have clarified everything, the agents would give you the funds. The agents would visit you during the payment date to collect your payment.

  • Available to Those with Poor Credit 

A doorstep lender does not consider your credit score or credit rating only when deciding to lend you money or not. They have several criteria as to who can borrow or not, and even with a poor credit rating, you might still qualify for a loan. Since the clients are from poor neighbourhoods, many of them would have poor credit or no credit at all, which disqualifies them from taking loans that require a good credit rating.

  • Quick Release of Loan

One downside of taking a bank loan is the delay in the approval and release of funds. The lender would check your application first to make sure that you have met all the requirements. Transferring the funds could be a problem if you do not have an existing bank account. If you have doubts regarding the means of sending funds to you, a doorstep loan is the best way to go because the agents of the lending company bring the cash to your home.

For your emergency needs, a doorstep loan is the best answer. Application and approval are quick, and you can get the funds and pay your debt straight to the agents that come to your doorstep.