Short-term loans are unusual in the sense that if they are utilised in a sustainable way, they can be extremely helpful when it comes to your immediate financial needs. However, if you abuse this significant form of financial assistance, it can end up being a burden.
In other words, any cons involved in short-term loans will arise mostly due to your own incompetence or abuse of the loan. This article will take you through some of the advantages and disadvantages involved in short-term loans.
Pro: Instant gratification
In terms of requiring funds for emergency situations like medical situations or other calamities, short-term payday loans are perfect for your needs. If you’re a week or two shy of your wages coming in and you can’t afford to delve into your own pocket to deal with an unexpected expense, a payday loan will cover you until then, when you can repay it.
Some services offer instant cash sent to your bank account. There’s just an application form to fill in, as well as proof that you have a regular income and can afford the loan.
Con: You may have to pay higher interest fees
Bear in mind, the cons associated with short-term loans are regarded as potential disadvantages, because they very much depend on your own sense of responsibility. Similarly, if you are faced with high interest fees, this will most likely be because of your own credit history.
While some lenders calculate the interest rate on a daily basis, others apply monthly rates instead. The difference in the fees is dependent on a number of factors. There will also be differences in the cost of valuation as well as other legal fees and sometimes, early repayment charges.
Pro: Short-term loans are easy to get
Provided your credit history is sound and that you can prove that you have regular income, you can get funded by a short-term loan within a day’s time. Usually, you need to provide your name, address, mobile number, your income, bank account information and your debit card details to begin with.
After reviewing the lender’s terms and conditions, you could get approved for a short-term loan in a matter of fifteen minutes.
Con: Incurring fees for late repayment
Make sure you know what you’re getting into before you fill out your application forms and that the company you use is authorised by the FCA. If you’re not sure whether you’ll be able to pay the loan back in time, perhaps you should resort to other measures. Once again, this very much rests on your own sense of responsibility. If in doubt, seek alternative methods. If you’re sure, you can apply for a short-term loan here.