How long should you borrow a short term Loan

Created: 2017-12-20 13:22:00

What are short term loans?

Sometimes it is really difficult for someone to take out a personal loan for a number of reasons and if you only need extra money over a short period of time then your best option is a short term loan. You can pay it back within a year with organized payment plans that suits your needs. Make sure you do your research on how to get a short term loan as with any other product you buy there is more than one option and they all differ from each other. The best tool to use when deciding which loan will suit your needs best is a price comparison website, you can compare each loan and it will save you hours of searching the web. For example cash kitty is a popular website people tend to use to compare prices and payments. Many users would suggest getting a cash kitty loan.

Before you rush out and grab the first loan that presents itself to you, keep your options open as there is more than just one. Each loan holds its own APR %, payback method, the amount you can borrow amongst other things to take into account. Choosing which suits your needs is just as important as the money you will be borrowing. Each short term loan has a set amount of time you have to pay it back. Which options do you have? And what are their limitations?

Credit Card:

Choosing the credit card option gives you a substantial amount of good credit. The best choice when coming to a credit card is making sure you purchase one with 0% interest when purchasing products. More and more banks seem to be offering this as an option surprisingly enough so it should not be hard for you to stumble upon one. This option is usually only offered to borrowers with a good credit score so it is important that you have a good track record of making payments on time and not missing any. Most credit cards offer a repayment window of 27 months with zero interest added but depending on your situation and personal needs it could be less. It is advised to try and keep it in the 12 month range if possible. The amount you can borrow differs but usually kept in the range of £5,000.

Overdrafts:

Getting a bank account that also offers you an overdraft will look good on your credit score. You can obtain one at nearly any bank or building society with most being interest free although some may add interest. Make sure you check each terms and conditions before proceeding. Generally overdrafts can last up to 12 months upon opening the account. The cost for this option is absolutely free of charge.

Loans that are Flexible:

Flexible loans are in many ways the same as personal loans only they give you a little more breathing space when it comes to the repayments you make. They can be a little harder to get than the others because the bank will do the same checks they would on a long term loan and they are usually for a much larger amount of money. The upside is you can change the amount you make on installments whenever you need to so this would be a brilliant option in case your circumstances change suddenly. These loans are perfect if you need to borrow money and pay it back within a 12 month period it is not advisable to borrow for more than 12 months. The cost for this option can differ between 8% and 12% depending on the individual.

How long should you borrow short term?

A short term loan is highly recommended to only be borrowed and paid back within 12 months and no longer. If payments are still being made after 12 months you are more than likely going to have a rise in the APR% spectrum. In certain circumstances some people get out 30 day loans where extra cash is needed a short term period. It all comes down to your personal choice and it's down to you to work out your installments and what you can afford before getting out a short term loan. The higher your installments are the quicker the loan will be paid off. If you have interest to pay that to will be less the higher your installments are.

Warning: Late repayments can cause you serious money problems. For help, go to moneyadviceservice.org.uk