If you find yourself in a position whereby you need to borrow money then the beauty of today's marketplace is that there are hundreds, if not thousands of short-term loan providers. There really is a plethora of unsecured loan companies positioned within the online market space that have created a huge amount of choice for the average lender needing to borrow short-term loan. The increased competition within the small loan lending sector has also led to clear advantages for people in need of short-term credit solutions. Whereas previously it may have been quite difficult to borrow a small sum of money, with an option to pay it back within a short period of time, this is now a common lending structure across the short-term lending market space. The increased choice of loan providers across the UK sector has also culminated in increasingly low annual percentage rates on loan offerings, and this has enabled lower and lower interest rates to be offered as part of loan packages in the UK.
Which Loan to Apply For?
But what is right kind of loan to apply for? The quick answer is, what do you actually need a loan for? If you needed to borrow a small sum of money, say for example up to £1000 then there are multiple loans providers that can provide smaller funding opportunities for people who need to borrow sums of money, up to £1000. There should always however be some with caution when one is considering to apply for small sums of money, particularly around the £100 - £1000 mark. Typically these quick loans providers will charge higher interest rates in comparison to that of the larger loan companies, who often offer loans of £10,000 pounds plus. The smaller loan organisations do however provide a much-needed service for people who need to access credit quickly. As the sum borrowed is often smaller, this can culminate in a quicker payout time when considering applying for this type of loan. This is because technically, it is easier to distribute smaller sums of money in comparison to larger loans of say £10,000 plus as there is less onus on ensuring there is a capability to repay the debt.
Secured Loan Provision
With regards to larger loans, again, there are hundreds of major loan providers who offer both a secure and unsecured loan provision. In terms of secured loan provision, the sky is really the limit when it comes to how much can potentially be borrowed. The key word within this type of loan is the word 'secure'; this means that the money borrowed is secured against collateral, for example a house or, in the case of logbook loans, a car. Interest rates are often much lower when it comes to secured loans, but typically the money that is borrowed would be a lot larger in comparison to that seen within the quick loan arena. A word of caution here though; as the loan there has been borrowed is secured against collateral, if the money that is borrowed is not repaid then the collateral that has been put forward as a security against the loan can be at risk of being lost. Essentially, this is how secure lending operations make the majority of their profit, in addition to the interest rates that they add-on to the loan that has been borrowed.
If you are considering taking out a loan for a car it may be worth exploring directly with car finance loan companies. Again, with the car finance loan sector many of the major car finance companies will make the majority of their profit through the annual percentage rate that is added on to the loan in purchasing the car. Some lending operations within the motor vehicle industry can provide you with a 0% interest rate on borrowings, and therefore this is clearly the route to take particularly when given deterioration levels that come with motor vehicles and the ongoing associated costs.
Advantages and Disadvantages
So there is therefore both short-term and longer-term loan operations across the United Kingdom. Both have their advantages and disadvantages. In short, short-term loan lending often has a high annual percentage rate but the approval criteria is often significantly less stringent to that in comparison to the longer term, higher payout loan providers. Quick, short-term loans are extremely useful if money is needed quickly and in many cases following the eligibility criteria being met the money can be deposited exceptionally quickly. This contrasts with high end, secure loan provision which often comes with lots of administrative checks and stringent regulations around approval criteria.