Financial problems come irrespective of their size. Some of them remain for a shorter duration, while some trouble you for a long time. Fortunately, the UK loan marketplace does have solutions for every scenario.
The loan providers here, whether there are mainstream lenders or online ones, provide long-term and short-term loans. This means that you can opt for a longer loan duration when you have a considerable financial issue. Otherwise, a small loan is sufficient to calm the urgent financial situation.
There is another discussion about whom to approach for a loan. As I have just mentioned, these sorts of loans are available through both traditional and new-age lenders. As far as long-term loans are concerned, you can go with banks or other such financial institutions.
Applying for a short-term loan from a direct lender has its significance. Do you want to know the reason? Obviously, you get loan approval and fund disbursal on the same day. Indeed, a direct lender works entirely online, making it easier for you to submit your loan query by sitting at your home, office, or maybe in a coffee shop.
For the last few years, the significance of direct lenders has increased significantly in the UK. However, this has not diminished the value of traditional lenders; direct loan providers have emerged as the perfect alternative to them.
This indicates that you can rely upon direct lenders whenever you feel uncomfortable financially and need quick funding from somewhere.
What are Short-Term Loans?
The definition of these loans is quite simple. A loan is available for a shorter duration, and a small amount is called a short-term loan. It means you are not eligible for long-term loans. Instead, you can easily qualify for short-duration funding.
You can get these loans for a maximum term of 36 months. Based on the patterns of direct lenders in the UK, you can avail yourself of up to £10,000. However, depending on the lender, you may get a higher amount for a slightly longer duration.
One thing is for sure: loans for the shorter term are high-interest rate loans. Due to their limited term, you have to pay higher monthly instalments. Still, such disadvantages do not decrease the value of these loans. You can still opt for them, especially during financial emergencies.
5 Varied short-term loan options from a direct lender
Do you want to know which loan options fall under the short-term category? I will not extend your wait. Therefore, I have compiled only a few of them for you. Let us start our discussion.
- Payday Loans
These are the most applied forms of short-term loans but with significant risks. Under payday loans, you will borrow a lump sum, which you must pay in full on your next salary day. Therefore, it is a small loan and carries a higher interest rate.
The most significant parts of these loans are:
- You do not need collateral and a guarantor
- You can apply with your part-time income if you do not earn full-time.
- There is no limitation to credit scores, as people with any credit rating are eligible for these loans.
I still want to alert you about the high interest rates because you must only approach a genuine direct lender.
- Bad credit Loans
These are among the most useful short-term funding options in the UK. Many people are here having the trouble of poor credit records. In fact, they are the ones who have to approach alternative lending sources of traditional lenders.
These loans are specialised forms of personal loans dedicated to those with bad credit scores. The interest rates will be higher, but the ease of fetching funds will remain.
- These loans belong to soft credit checks where the lender avoids strict assessment of individual credit scores;
- You need to earn a stable income to convince the lender of loan approval;
- Collateral is unnecessary, but you can arrange a guarantor if you have a reliable person with a good credit score.
- Text Loans
Another form of short-term loan from a direct lender is a text loan. To apply for these loans, you need to send a text message from your mobile to the lender. One of the representatives of your loan company will call you to discuss your loan preferences.
You can share loan queries with the representative and get the quote instantly.
- You can avail of the loans for up to 6 months
- You can choose fortnightly, weekly or month-wise loan instalments
- These are income-based loans and do not involve considerable loan obligation
- No Guarantor Loans
Apart from payday loans and loans for bad credit, several people in the UK apply for these loans without a guarantor. In these funding products, you do not need any guarantor as the third party to take your loan guarantee. You will be solely responsible for making the repayments till the term ends.
Direct lenders are efficient when they prepare specialised no-guarantor loans for those with adverse credit profiles. The best instance of this is very bad credit loans with no guarantor from a direct lender.
- These short-term loans are approved despite any credit score;
- You can opt for these loans when you want a considerable debt consolidation;
- As no guarantor is there, you can choose favourable loan terms and repay on time
- Timely repayment will further improve your credit scores significantly
These are not only specialised loan products, but many other direct lender loans are available with no guarantor.
- Unemployed Loans
Unemployment is such a worrying issue that has to be solved soon. However, it will only be solved once you find a new job. How will you manage your finances till then? You can do this by opting for a short-term unemployed loan.
- You can get the approval on your part-time income or unemployment benefits;
- Lender will fund you until you get a new job;
- If you are earning no income, then you can arrange a guarantor with a good credit score to get loan acceptance
Conclusion
No one can doubt the significance of a short-term loan from a direct lender. Still, there is no guarantee of loan approval. There is only way to get loans on guaranteed approval i.e. to ask for only affordable amount.
Lenders will be impressed if you want an affordable loan that you can easily repay with your monthly income.
Jessica Rodz is the Senior Content Writer at Cashfacts. She has a long career in the field of content writing and editing. Jessica has the expertise in the UK lending marketplace where she has worked with 7 different lending organisations and acquired many responsibilities from preparing loan deals and writing blogs for their websites.
At Cashfacts, Jessica is managing a team of experienced loan experts and doing a major contribution in guiding the loan seekers via well-researched blogs. She has done graduation in Business (Finance) and now currently doing research papers on the UK financial sector.
