Have you ever got stuck in a situation where you are to pay money and suddenly realise that your pocket has been picked? It can happen when you get the bill on your table in a restaurant or when you are at the check-out counter in a store.
This can happen to anyone, and unfortunately, it is quite an embarrassing situation. Well, when it happens, you call someone from your home with some cash. This may take some time, but now you do not need to wait as you can take out a text loan embarrassingly.
Text loans are pocket loans, also known as payday loans. They are very short-term loans that help tide you over during emergencies. As these loans are granted in case of emergencies, you can take out mini text loans from direct lenders using a mobile phone.
You just have to send a text message to a direct lender telling how much money you want to borrow, and a lender will transfer money directly to your bank account within a couple of minutes.
How do text loans work?
Although text loans can help you get money in your account within a couple of minutes, it is not as easy as it seems. Text loans are particularly a solution for those who are already registered with a Direct Lender.
If you are a new borrower, you will not be able to avail of these loans. When you are already registered with your lender, all your details are saved with them, from your bank account details to contact details. A lender will quickly go through whether you can afford to pay back the debt.
If so, you will get money in a split second in your account. The entire process takes about 15 minutes. The maximum amount of money you can borrow with these loans is £500. However, due to their policy, some lenders could whittle down the lending amount.
Can you apply for a text loan with a bad credit score?
Yes, you can apply for a text loan with a bad credit rating. However, interest rates could be higher. Having said this earlier, text loans are payday loans, and therefore they are not subject to a credit check. The lending decision is quickly made by evaluating your bank account details.
If a lender is sure that you will be able to manage your current expenses along with the debt, they give the nod. It is crucial to note that these loans involve a very small amount of money and therefore require to be paid off in a lump sum.
You are supposed to pay back the debt after 14 days or probably a month, depending on the amount you borrow. Even if you have a good credit score, you will not be able to get approval for a loan at a lower interest rate.
What are the benefits of text loans?
Text loans have become very popular because they allow you to tide over during financial emergencies. Here are the benefits of these loans:
- Easier to manage
One of the most significant benefits of these loans is that they are easier to manage. The loan amount is not too considerable, so you do not have to wait for months to settle the debt. After some time, you are to pay back the whole of the debt in a lump sum. You are entirely debt-free once you have settled the whole debt.
- Approved quickly
Another benefit of these loans is that you do not have to wait too long for approval. You just have to send the text, and the lender will quickly analyse your bank statement to determine your affordability. The whole process takes just 15 minutes. Therefore, these loans are best for emergency situations.
What are the alternatives to text loans?
If you are stuck in a situation where you need an immediate injection of cash, no loan can be a substitute for these loans. For instance, if you are in a restaurant and money has fallen short, text loans are the best ways to get funds.
However, if you are seeking other alternatives, you will have to call your friends to come over to help you. Text loans have been designed to help you tackle such embarrassing situations, but if you need money for unforeseen expenses, you should use other loan alternatives:
- Bad credit loans
Since text loans are not subject to a credit check, they can be outrageously expensive, especially if you have a bad credit rating. You should look for bad credit loans with guaranteed approval in the UK instead.
These loans are an affordable alternative. A lender will run a credit check and analyse your income statement thoroughly to determine your affordability.
- Friends and family
If you are not able to qualify for bad credit loans, you should seek help from your friends and family. Borrowing from your parents could be a better alternative as you do not have to pay interest on top of what you borrow.
Likewise, your best friends could also help you in your hour of need. Make sure that you will pay back the money on time. Instead of treating it as an oral agreement, you should make a contract in writing so your friends know that you are actually serious about repaying the loan.
The bottom line
You can apply for a text loan with a bad credit rating, but they have been designed to help you avoid embarrassment. If you are looking to borrow money to cover unforeseen expenses, you should consider other alternatives.
Try to seek help from your family and friends. If possible, apply for bad credit loans. They are more affordable than text loans. Set aside money for emergency expenses, so you do not need to borrow money when unforeseen expenses crop up.
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.
