Short-term loans are a common type of finance used by a range of people. And due to the emergence of online lenders, they’re available to those that may have less than perfect credit. Short-term loan direct lenders offer a range of loan amounts to suit you that you can use to deal with an emergency. The application process is quick and easy, so you can have access to the amount you need to help you in no time. Below, we’ll take a closer look at how to qualify for one of these loans, and a few tips to keep in mind.
Why choose a short-term loan?
Short-term loans are different from other types of personal loans. As the name suggests, they have shorter repayment terms, usually under a year depending on which type of short-term loan you choose. Payday loans are a popular type of short-term loan, which usually require you to pay the full amount back plus interest within the month. These loans are commonly used to help manage an emergency expense that your monthly income may not be able to stretch to cover. They can be helpful if you’re faced with a broken boiler, an urgent home repair, or medical bills that you’re unsure how you’d afford otherwise.
Lenders that offer short-term loans tend to be more lenient when it comes to qualification, meaning your application could be accepted even if your credit score is not perfect. Many of these short-term lenders of loans quickly, some in as little as 24 hours, which is why they’re a popular option for those dealing with an emergency.
How to Qualify
So, what do you need to qualify for a short-term loan? For your application to be successful, here are a few factors that are essential when it comes to the application process.
- Income: Lenders will look at your income to ensure that you can afford to pay off the loan. This could be from full-time or part-time employment, or benefits. Having a steady income makes it less of a risk to lend to you, and shows you won’t fall into financial difficulty if you’re approved.
- Credit score: Whilst this isn’t as important with online short-term loan lenders that base their decision on affordability, having a good credit score not only means you’re more likely to be approved, but it also means you’ll be more likely to benefit from better interest rates.
- Identity: You’ll need to provide your lender with some personal information when you apply, such as evidence that you’re over 18 years old, a UK resident, and your home address.
Tips for approval
If you’re trying to find the best short-term loan to suit you, and you need a few tips for approval, here are a few ways that you can boost your chances.
It’s essential that you take the time to compare and research lenders and the loans they offer. Compare terms, conditions, and additional fees to help you make your decision. Also, ensure you check your lender’s reputation by reading reviews from other customers – this way you can choose a lender and a loan that suits your requirements.
Read The Small Print
It’s unlikely that lenders are going to include everything you need to know in the initial short-term loan advert. This is why looking at the small print is essential. This is where you’ll find crucial information about fees, and additional costs that may make the loan too expensive. It may also list further requirements that may affect approval, so make sure you take the time to read all the information available.
Only Borrow What You Need
Only apply for and borrow what you need. Not only will increasing the amount you apply for make it riskier for the lender, it also means you’re more likely to struggle to pay it off in a short amount of time, which could contribute to a cycle of debt. Only borrow as much as you need so you can pay it off as necessary.