It can be difficult when you need money to carefully consider all of your options. It is always wise to make sure that you have thought about everything so that you know that you are doing the right thing. However, taking the time to do this can sometimes feel like a waste of time. You may just assume that there is not much difference between different loan types and that you will just take the first one that comes along. However, this can be a risk because you could be choosing one that is totally unsuitable for you. It is therefore wise to find out more about loan types so that you are prepared.
It is very likely that you will know a bit about traditional loans such as credit cards, overdrafts and personal loans. However, there are less traditional loans, such as quick loans, which are not available form high street lenders, which might also be useful. It is good to understand more about them, so that you will know whether they will be a good option for you.
What are quick loans?
Quick loans are payday loans. You may have seen advertisements on the television for them. These loans will allow you to get money fast even if you have a poor credit rating. These loans came about when it was observed that a lot of people were not able to borrow money because they had a poor credit rating. This meant that they either had to suffer or turn to borrowing methods which were not regulated and therefore very risky. Quick loans replaced these as they are regulated and are much lower in risks, with legislation protecting the borrower, like there is in traditional loans.
The loans have a simple concept. You will be able to borrow a small sum of money until you are next paid and then you will repay it all and the interest and fees. This means that the loan will last anything from a few days to weeks, but no longer. The borrower will be able to borrow between £100-£1000, although first time borrowers tend to only be allowed to borrower smaller amounts initially, until they build up trust with the lender. If they pay that back in full, they are likely to be offered a higher amount next time if they need it.
The application process is quick and simple and can usually be done online or over the telephone. Then the money can sometimes be made available in a few hours or anything up to a few days. This can be a lot quicker than traditional lenders, but you will need to check to be sure exactly when the funds will be available.
When arranged you will find that there is a direct debit set up to repay the loan in full on the day that you get paid. This means that you do not have to think about setting up the repayment yourself or remembering to do it. Therefore, you can relax and know that when the repayment is due there should be plenty of money available to pay it. Of course, you will need to make sure that you are sensible in the amount that you borrow and that you will be sure to have enough money in your salary to repay it and to cover any other money coming out at that time plus your bills and anything else you need to buy until you next get paid.
Who are they for?
So, quick loans are designed to help quite a few different people. Firstly, those people that it was designed to help i.e. those with a poor credit record. You may not have a poor credit record at the moment, but it can be a good idea to keep this in mind just in case your circumstances change at all. The loans are also very quick to organise and so if you need money really quickly, then they could be useful for you. Also, if you only want to borrow a small amount of money then you could find that this type of loan will be really handy.
It is worth noting that the lenders do not restrict who can have the loans so you do not have to fit into a specific category. If you feel that the loan is the right one for you, then it is a good idea to get one. However, it is really sensible to make sure that you carefully research this. Look into all loan types to ensure that you are choosing the right one. Also compare the different lenders so that you can check which of them will be the best. Look at how long they take to organise a loan and how much the loans cost and that will enable you to think about which might be the best for you.