Five Questions To Consider When Thinking Of Applying For A Short Terms Loan
Article by Richard Waterstone
If you need cash fast and are considering using the services of a payday loan company there are some fundamental questions you should be clear of before you make your final decision to borrow money.
1. What are short term loans?These are loans which are, as the name indicates, a cash loan which is taken out for a short duration of time, typically until your next pay-day. They are not designed to be long term loans, however, it is possible to roll over short term loans or re-apply month after month. If you are looking for a long term loan it would be advisable to speak to your bank or building society.
2. How much can you borrow?This will be dependant on your monthly take home pay. That is to say the money which is paid to you after you have paid tax and national insurance contributions. Reputable lenders will carry out an eligibility check to ensure you have the funds to pay back the loan, plus the fees, once you have been paid again.
The initial amount you can borrow is not always very high, typically approximately 400 pounds will be the maximum. This is due to the high risk that the lenders are taking. Once you have successfully paid back your first loan on time and in full, many lenders will then increase the amount they will lend you in the future. Although there are no restrictions for those with a poor credit history applying, responsible lenders will want to have some certainty that the risk they are taking is realistic.
3. How is the money paid?Many online lenders use two different ways of paying you the cash. One is referred to as CHAPS, which is the fastest method for which there are additional charges, but this method does have the potential of transferring money with an hour into your bank account. The other method used is referred to as BACS, this type of transfer is slower and can take approximately 3 days.
You should also realise that money transfers cannot be made unless the banks are operating, therefore weekends and public holidays will need to be taken onto account as no money transferring will take place which can delay the money being paid into your bank account.
4. Are credit checks carried out?This will be dependant on the lender you use. Some do carry out credit checks, but just because you may have a poor credit history does not mean that you will be denied short term loans.
5. What qualifying criteria is needed to be able to apply?Payday lenders who are licensed and responsible lenders will have qualifying criteria which includes:
* Applicants must be at least 18 years old.* You must be resident in the UK* Applicants must be in regular employment, with a minimum take home pay of 750 pounds per month. * Applicants must have a valid bank account which receives direct deposits, they must also have a valid debit card.
About the Author
Richard Waterstone is an expert on a range of financial subjects. Find out how to apply for a Short Term Loan at his recommended website http://www.lendingstream.co.uk/
