When considering short term loans and the repayment terms they have to offer, thankfully there is a good selection of choice which exist. Short term loans are also known as payday loans and online loans and more recently; instalment loans. All of these names cover the resource officially defined as ‘short term and high cost’ borrowing. These loans are different to borrowing which is considered as mainstream because of the sums of money being lent and the terms of repayment being offered. Whereas a bank loan may be repaid over a number of years, short term loans are instead repaid over a much shorter period of time. Equally when looking at the same example of a bank loan, the loan sums being considered are generally large in value, ranging up into the tens of thousands, with these online loans the average loan value is around £300.00. So clearly there is a big difference between the short term loans and the more traditional and longer term lending options which also exist. As consumers therefore we need to be aware of this and select these resources with care.
A short term loan may be a great tool for those of us who experience a cost which was not planned. Whereas the likes of our rent and car insurance needs to be paid for each and every month, an emergency dental treatment is a little more difficult to plan for in advance. Instead, when an emergency cost presents itself it may be that the loans we are discussing here today, are a useful resource to consider. For those of us who prefer to repay borrowing by way of monthly instalments, the newest addition to short term borrowing is likely a good choice. Instalment loans are quickly becoming the preferred choice because of their flexibility in terms of repayment. Whereas for many years a loan of this nature meant agreeing to repay the amount due as a one-off repayment, nowadays lenders have more flexible and therefore customer friendly options available. Instalment loans come in a variety of different term terms, allowing borrowing over anything from 2 months up to 12 months in some cases. This means we have the ability to better plan for the cost of repayment for such loans, should the resource be needed for an unexpected cost.
It would seem that as a collective we are becoming increasingly drawn to borrowing which allows a number of repayments to be made, instead of a single and sizable repayment. Whether this be via a credit card, store card or these short term loans as discussed here today, the option to repay in smaller and therefore more manageable ‘chucks’ seems to be key. Like with any form of borrowing however, it is important when considering short term loans that we do so with our own individual circumstances in mind. This means reviewing the options available in a sensible manner and then making an informed borrowing decision.