Taking out a short term unsecured loan is a quick and easy way to cover an emergency expense or cash flow problem. But what types of loans are available to you, and what are the pros and cons of each? Read on for a quick guide to your loan options.
Bad Credit Short Term Loans
The advantages of bad credit short term loans are fast pay outs, and a simple process of applying. However, interest rates on payday loans are sometimes as high as 4000%, so it’s worth searching for an online loans provider who offers a similar service for a lower rate.
Peer to Peer Loans
Otherwise known as ‘social lending’, these are a relative newcomer to the loans marketplace where those with savings invest their money, which is then lent out to those who need to borrow. Peer to peer loans offer the advantages of better interest rates for borrowers and investors, and a friendlier and more human service than high street banks.
These can be a useful way of borrowing, provided you pay off the amount in full every month. If possible, apply for a 0% introductory rate credit card, to avoid racking up high interest charges.
Using an authorised overdraft facility is a cost effective way of short term borrowing, but depends on good credit. If your credit history is poor, then you may want to consider a bad credit loan instead.