If you’re looking for credit to cover an unexpected financial emergency, it’s likely you’ve started to consider taking out a personal loan. But is there a faster way?
In this article, the Best Short Term Loans team look at what a personal loan is, what instant loans are, and how to find the best credit solution for you.
As one of the most popular forms of personal finance in the UK, personal loans give you access to the money you need in an emergency whenever you may need it.
Personal loans are also an integral part of the UK economy with more than £35 billion being taken out each year. This money is then pumped back into local communities; fuelling economic growth across the country.
These loans are taken out specifically for you; in your name and against your own credit history. That means you are also personally liable to repay the money you’ve borrowed.
Why do people take out personal loans?
Personal loans are actually a lot more common than people realise. They are frequently used as a fall back in financial emergencies and when you simply don’t have the money up front to cover a certain expense.
Millionsof Brits have used personal loans to:
• Cover large expenses like tax bills, car repairs, and funeral expenses.
• Spread the cost of their wedding.
• Buy home improvements and repairs.
• Visit friends and family abroad.
• Pay for a well-earned holiday.
The main benefit of a personal loan is that you are able to pay for expenses like these upfront then spread your repayments into manageable monthly instalments.
TSB reported that 31% of personal loans are taken out for debt consolidation, 25% for vehicle purchase or repair, and a further 3% to pay for holidays.
How much do people borrow on personal loans and for how long?
Each personal loan provider will have their own terms and conditions for a loan, including the amount you can borrow. Some will let you know the maximum amount you’re eligible for based on your credit history.
Typically you can borrow between £1,000 and £25,000 and pay the debt back over a fixed payment term of between one month and ten years.
Are they secured?
The vast majority of personal loans are unsecured. This is of particular importance as it means you don’t need to put up any of your valuable assets as collateral to receive the money.
Loans that require this security mean that, should you be unable to repay your loan, your lender could choose to repossess your home, car, or any other asset you use as collateral.
Where can I get a personal loan?
Personal loans are on offer by a wide range of different lenders. This could be through your usual bank or building society, however these loan providers often have strict eligibility criteria and fewer options regarding minimum loan amounts and repayment terms.
Some peer to peer lending sites like Zopa also offer personal loans. These can often be cheaper than the usual bank route – especially if you have a good credit rating.
Can I get a loan straight away?
One drawback of personal loans is that many providers are not prepared to lend money in a hurry. If you were to apply through your bank, your application could take days to process before you are accepted or rejected. This can make things particularly difficult if you need to pay a bill or call out a tradesman fast.
Do I need a good credit score for a personal loan?
Personal loans through banks and peer to peer lenders almost always require a good credit rating to accept your application.
Along with the usual requirements of every lender that you must be over the age of eighteen and a UK resident, many banks also state you must hold a current account with them too; greatly limiting your options when it comes to finding the best lender.
Affordability assessments also tend to be much stricter too. Not only must you earn over a certain threshold, but many also demand details as to how secure your job is before they’ll give you credit.
Instant loans are fairly similar to personal loans with two key differences; they’re much faster and often much more flexible.
Also known as quick loans, this type of credit is renowned for its quick processing and approval times with funds appearing in your account the very same day – sometimes within just a few minutes of being accepted.
Part of this increased flexibility with instant loans is that you can choose either a short-term or a payday loan depending on when you will be able to repay the money.
Short-term instant loans still go into your account on the same day as your application, but you can have between two and twelve months to pay back the debt.
The longer your repayment term is, the smaller your monthly instalments will be. However, it is also important to note that the longer your loan lasts, the more interest you will accrue in the meantime so you may end up paying back more in the long run.
If an unplanned expense arises and you won’t have the money to cover it until you next get your wages, an instant payday loan can help you bridge the gap till payday.
You will receive your instant loan the same day as your application then simply repay the full amount when you get paid.
Why do people take out instant loans?
Instant loans are perfect for when you’re in a financial emergency. This fast and short-term form of finance could help you to:
• Pay an overdue bill
• Repair your vehicle
• Cover the cost of medical or dental treatment
• Pay for a loved one’s funeral
• Repair or replace something in your home
• Help you survive an unexpected delay in income
How much do people borrow on instant loans?
Generally you can borrow between £100 and £2,500 with an instant loan. This makes them particularly helpful when you only need smaller sums of money that is simply not offered by large banks.
Are they secured?
Like almost all personal loans, instant loans are unsecured. You can get the funds you need fast without having to put your home or other assets at risk.
You will still have to meet your monthly repayments as agreed.
Where can I get an instant loan?
There are a huge number of reputable and experienced specialist instant loan providers in the UK. These will all have different criteria, terms, and conditions, so shopping around for the most suitable and best priced personal loan is always the best option.
You could approach these lenders directly to find out what prices they are offering, but this can take a great deal of time and effort that – presumably – you don’t have to waste when looking for instant credit.
Furthermore, lenders tend to base their rates on your individual circumstances like your credit rating and personal information. That means you will need to formally apply for the loan in order to find out how much it will cost you. When shopping around for the best price, that means a lot of applications.
Every application you submit leaves a lasting footprint on your credit file which can be seen by all future loan, mortgage, and alternative finance companies you work with. Having too many loan applications or having multiple applications close together reflects badly on you as a borrower; meaning you are more likely to be rejected for credit.
That’s where a skilled loan broker like BestShortTermLoans comes in incredibly useful. We only carry out a single credit search to support a number of applications. We’ll then match you up with the instant loan provider most likely to lend to you offering the lowest possible price for you to apply with directly; protecting your credit score.
Can I get an instant loan straight away?
Yes. Instant loans are specially designed so you get a decision on your application in just a matter of seconds. If approved, the money will be paid directly into your bank account within just minutes; giving you access to the finance you need the same day.
Do I need a good credit score for an instant loan?
While lenders will still need to carry out their own checks, they tend to be more open-minded when it comes to instant loans.
This type of short-term finance involves relatively small sums of money and this makes them ideal for those with a less than pristine credit history.
Can I get a no credit check instant loan?
You may have heard of loans being offered without needing a credit check, but this simply isn’t true. All reputable lenders will legally need to perform a credit search into your borrowing history in order to lend responsibly.
This is both to balance the risk to the lender if you are more likely to default on payments and to protect you as the borrower in case the loan is not affordable for you.
Get an instant loan that works for you
Here at Best Short Term Loans, we’re not lenders. We are a team of highly experienced credit brokers. That means we are here to help you find the best priced instant loan deal for your circumstances.
Thanks to our close relationship with all our lending partners we know exactly what it is they look for in a borrower. When you fill your details into our smart computer system, we’re able to match you up with the lender most likely to accept you for credit within just seconds.
We can help you find the lowest possible price for the loan you need. You will know exactly how much you’ll need to repay each month and how long for with absolutely no hidden costs or fees.
Our service is completely free of charge so if you need money to cover a surprise expense fast, Apply with Best Short Term Loans today.