There are many companies on the Internet offering short term loans. So many, in fact, that as soon as you see the results in Google search, your stomach flips over as you realise how many firms there are and, no matter how many you check out, you’re convinced that the next instant cash loan site you come across is going to be the one that offers you the best deal.
If you don’t get out of that cycle soon, you’ll still be trying out the same day loans the next day and before you know it, payday will have come and gone and you’re further in debt than before you began searching!
You may be surprised at details such as high interest rates and the seemingly small amounts of money such a high number refers to.
Here’s a short guide to what it all means if you want to search yourself, but we’ve already done that for you with our top five short term loans, if you want to trust us to take the headache out of the laborious task of the search cycle.
What’s the difference between a normal and a short-term loan?
There are several differences between what you would class as a standard loan that you apply for through your online bank account facility or go into branch for and the instant cash loan you’re looking for to satisfy that immediate cash requirement.
In no particular order, here’s an overview of what to expect when you apply for that online instant cash loan:
- you can set the payback terms
If you go into branch, an advisor will listen to you and then offer a loan at a fixed rate and payback period based on what the bank is offering at that time.
With a instant cash loan, you can get the chance to set the repayment period, the theory being, the longer you take to pay back, the more interest you eventually pay or your payback date is set to transfer the money the minute your salary hits your bank account.
- the interest rate looks horrendous
What scares the pants off people when they see the interest rate of an instant cash loan is how high the APR is, as much as 2,000% and more in many instances.
Unlike the long-term bank loan, where they make smaller amounts over longer periods, you have to judge short term loans by the actual monetary figure. For example, you could apply for £200 to tide you over an expensive month, with a repayment figure of £258 after 30 days. You weigh it up, see you’re better off than being over you’re agreed overdraft anyway and have the added bonus of an extra few quid in your pocket, but then your jaw drops when you see an APR of 2,100%.
You cannot judge short term loans on this criteria; they’re more risky by nature, as many are offered to people with bad or no credit history and they’re offered over such a short term that a figure of 6% APR on £200, the creditor would only make a quid on the loan – it just wouldn’t be worth them doing.
- quick loan, no credit rating
The benefit of most instant cash loan creditors is that they do not run a credit check on you. As long as you can prove your income, that you’ve been employed for ‘x’ amount of time and that your salary is ‘y’, then ‘z’, you’ve got the money in your bank within 24 hours, in most cases, sometimes sooner.