What you need to know about unsecured short term loans
Firstly, unsecured short term loans, also known as personal loans, are very useful as they allow you to borrow a relatively large amount of money, usually up to £25,000, without having to secure it on your home or any other possessions. Therefore this represents a low risk option for you, the borrower. You can take out a personal loan for many different reasons and although lenders will ask you for your reason for taking out the loan, they do not make any particular judgement about its use, they are more looking for reassurance that you have a purpose for the money and that you are not just going to fritter it away.
Where are the best personal loans from?
The best and cheapest personal loans are available from mainstream lenders, so therefore in order to qualify for these you will need a good credit record and also you will also need to be able to demonstrate that you will be able to pay back the loan at the agreed monthly repayments. Personal loans have competitive interest rates associated with them and you could see loans with interest rates as low as 4%, however it is more normal to see interest rates of around 5% for most applicants with a history of good credit. The loan amount you can borrow varies from lender to lender so you will need to check out all of the options to make sure that when you do apply for your loan it meets your needs and also that you meet all of the criteria needed to take out the loan.
What you need to do
Planning out what you are going to do with the money when you get it is going to take some time and effort, and you should put in at least as much effort into identifying the right loan for you. You will need to look at your own finances and work out what you can afford as monthly repayments. You can then use loan calculators in order to work backwards from here to find out how much you could potentially borrow.
You can then use this information to compare loans and see how much you would pay over the total term of the loan so that you know the long term costs in advance. Once you have carried this research out you will then be in a position to apply for your loan.
Payday loan alternatives
If you need a short term loan for a month or so for example then you may wish to consider a payday or short term lender. These types of loans are suitable for as the name suggests to get you through until pay day or a month or so. They are expensive and should be used very carefully as a last resort, however they are a better alternative than using unauthorised overdraft borrowing which can incurr even high fees and charges.
Related loan articles & news