UK Loans and Borrowing

A guide to borrowing money in the UK.

Short Term Loans

Will Short Term Loans be Quick to Arrange?

There are all sorts of different loans available to us and we cannot know everything about every one of them. This means that we may find that we have specific questions about them. With some loans we might know more. This could be because we have used that type of loan before or that they are just ones that are more common and people talk about a lot more. Some loans which are less common include short term loans. These are newer loans and they are not offered by traditional lenders or high street banks. This means that many people may not have even heard of them. It is a good idea though, to get to know all about all of the loans that are available. This is because you never know what you might need in the future. When you suddenly need money, you might be in a panic and might not have the time to research all of the different loans that are available.

Quick to arrange

If you need money in a hurry then you might be looking for a loan that is quick to arrange. Sometimes this can be hard to find. Firstly, a loan will tend to have an application form and this can take a while to complete. You might need to find out all sorts of information and get forms and things to send off as well. If you do not like filling out forms you may even procrastinate doing this for a bit or just find it too overwhelming.

Once you have done this you will need to send it off and wait for it to be processed. Banks tend to only be open 9-5 on weekdays and so this can limit the time that they have to do this. They will also take time to process all of the forms and make a decision as to whether they are prepared to lend you money based on a credit check. Then they will let you know how much you can borrow. Then you will be able to state whether you are interested in having the loan and they will organise to send you the money which could also take quite some time.

Short term loans

With a short-term loan things are slightly different. Firstly, you will usually apply online or even over the phone. This can be a much quicker process and therefore you will be able to get it done sooner. They will try to ask a minimal amount of questions and you will only have to send them a few forms to go with it.

Some short-term lenders such as Emu are open all of the time. They have staff employed over night and at the weekends so they can process forms much more quickly. They also employ a lot of staff so that they do not get a backlog of forms and they can be processed quickly. They will only do a very quick credit check to make sure that you have an income and to check when you get paid. They will not worry about calculating a credit score and deciding if they want to lend you money, they do not worry about this sort of thing. They will let you know how much you can borrow very quickly. In fact they can do this so fast, that you might have a decision in minutes and you could even have your money within hours.

So, in answer to the question, short-term loans are quick to arrange compared with other loans. If you already have a borrowing method set up, such as an overdraft facility or a credit card then this could be even quicker. This is because you do not have to arrange anything at all. However, they may not work in the way that you need. For example, if you need cash, then if you only have a credit card, then you will have to draw it from an ATM. Even if you have access to one, the charges will be high as if you draw cash on a credit card you start being charged interest right away. With an overdraft, you will find that the interest is pretty high. With both of these you will need a good credit record to have them and not everyone has this.

It is worth always checking with the potential lender though, before you decide to take out a loan with them, as to how long it will take for you to get the money. You could find that it will vary quite significantly. If you need the money really quickly then obviously it will be critical that you pick a lender that can help you out with that. You will also need to be careful to make sure that you fill in the application correctly and that you send all the forms off so that you do not delay the application process yourself.

Quick Loans

What is a quick loan?

A quick loan is another name for a payday loan. These are offered by specialist lenders that tend to only deal in this sort of loan. You will therefore need to look for them in a different way to how you would normally find a loan. You will not be able to approach your bank or look in the high street windows to see what they are offering so you will need to research elsewhere. Most quick loans will be only available online and so you will need to search there to find lenders.

Do not last long

The loans themselves are short-term loans, which means that they do not last very long. They might last just a few weeks or even a few days. This makes them very different to most other more conventional loans. The idea is that you borrow money until you next get paid. Therefore, if you have only just been paid, you will not have to repay for three weeks or so but if you get it out very close to the day that you are paid then you will only have it for a few days. This is a great advantage for people who do not like owing money, as the loan will be repaid really quickly.

Credit rating

The loans are also available to most people, even if they have a poor credit rating. Many lenders will do a thorough credit check and judge you on whether they think you are capable of repaying the loan. Then they will only lend money to those they feel they can trust. They will look for things like whether you have been able to repay loans in the past, what outstanding debt you have. If you make regular payments and if you have a regular income. It means that if you fall down in just one of these areas, it could mean that are turned down. It is tricky though, as different lenders have different rules, so you may not know until you have actually applied as to whether they are likely to turn you down. If they do turn you down, this will show on your credit record and will be something that could go against you when you try to apply for a further loan. With a quick loan, your credit record is not used as a means to judge whether you will be accepted and so the money is available to a lot more people.

Borrow small amounts

However, because the lenders have to trust that you will repay it regardless of what you have done in the past. This means that they will not be willing to lend you such large sums of money. Most quick loans are for £100 – £1,000 and you may find that if you are a first time borrower the lender may not even lend you this much. They may want you to prove that you are able to repay a small amount of money before they lend you more.

Repay in one instalment

The lenders will also normally want the repayment in one instalment. This means that you have to find enough money to repay the whole of the loan and the interest all in one go. This can be tricky because it means that you will have to find a significant chunk of money. To help with this you will have a direct debit set up to repay the loan on the day that you are paid. You should therefore have enough money in the account because your salary has gone in. However, you need to check, because your salary may not be enough to cover it or you may have other payments going out of the account on that day as well.

Quick to arrange

The loans are really quick to arrange as well. Quick loans were set up because it was recognised that people with poor credit ratings had no financial help in emergencies. Therefore, the lenders knew that they would need to get the money to borrowers really quickly. It can therefore be possible to get the money within a few hours. This is significantly faster than traditional lenders who can take weeks or longer sometimes to arrange a loan and by then it might be too late.

So, you can see that this type of loan is quite different to some others and this means that you may feel like you are not that familiar with it. Do not let that put you off though as it could be the perfect loan for your needs so you want to use one if this is the case. If you learn more about them now, then you will be able to know whether it is the right choice for you if you are in the situation where you need to borrow money.