Benefits of a Short Term Loan
Benefits of a Short Term Loan
Benefits of a Short Term LoanIt's been suggested recently that personal debt stands at an astonishing 1455 billion in the UK. This figure is spread across a wide range of borrowing types from student loans and car finance to credit cards. But with the average UK household owing approximately 57,000, including mortgage payments, it's easy to see why people are looking for short-term alternatives.
Long term loans are traditionally used for large amounts or to give the borrower more flexibility. However, there are also disadvantages to this type of loan. These disadvantages have seen the amount of short term loans being taken out rise dramatically in the last few years. Here, we explain why the short term loan is so popular by outlining its benefits.
Quick response
With a shorter loan repayment period, you're likely to get a quicker response to your request. By avoiding the main high street banks and going straight to a company where you will be able to get loan approval in just a short space of time. If you need a quick response, and money for a fast approaching deadline - the short term loan could be just the right thing.
Cash on the hip
Short term loans don't have to go into your bank account. The money you need can be lost through charges, bills and overdrafts that way. Instead, you can apply for a cash loan that will be delivered to your door and one that you're free to use in any way you like.
Short payback period
A short term loan means a short term payback. So, why is that good? Doesn't it mean I have to pay it all back before I can afford it? Of course not. By taking a shorter repayment period, you'll end up debt-free in a much quicker and more efficient way.
Less interest
Although you may technically be charged a higher APR than if you took a longer loan, the actual cost to you will be far less. Instead of racking up mounting interest charges every month for the next five years, you can pay off what you agreed to and get back to earning interest on your credit rather than paying it on your debt.
Bad credit
One of the most flexible types of personal finance, the short term loan is also available to people with a bad credit rating. Even if you've been refused a loan because of your credit, you can often get approved for short term finance that won't burden you with long term debts that you'll struggle to pay off.