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When it comes to short-term small amount borrowing, payday loans seem to be the more popular option. However, they can be quite inconvenient to pay back especially since a borrower is expected to pay the loan in full, along with the interest on his next payday. The expensive nature of payday loans makes it a little hard for a number of borrowers to get them paid off.
Choosing Installment Loans Among Others
If you want more wiggle room for your borrowing, a good option to consider is an instalment loan. Also made available for a small amount and for a short-term, it differs from a payday loan in the sense that you’re allowed to pay the loan back within 6 months or more. This effectively spreads out the costs, making the repayments significantly easier for you to do. They are also known for their expensive rates though, especially if your credit is bad. Nonetheless, their quick processing and easy requirements make them ideal for borrowers in need of fast access to cash.
What to expect
Borrowers can take advantage of larger borrowing amounts, ranging from £200 to £1,000. Depending on the lender, you can choose to pay monthly or weekly instalments. Loans terms can extend up to 12 months, effectively spreading out the costs. While this does mean getting a lower monthly instalment repayment, this means you’re paying more on the costs as a result. But if what you’re after this the convenience of paying a more affordable loan back, this is a great choice.
Where to apply
Most direct lenders, online lenders, and payday lenders offer this type of credit. You might want to consider referring to online lenders if you need cash fast. They are known for their faster processing. Some of them can get the funds you need in a matter of minutes too. Refer to direct lenders as well as this effectively gets rid of the costs of getting the services of the middleman. More importantly, look for legit providers.
When applying for a loan, you only ever get to see the specific loan rates and fees the lenders are willing to offer until they approve your application and they furnish you a copy of the agreement. This is somehow inconvenient due to the fact that as a customer, you’d want to know what they offer first before you do sign up.
Still, it should be noted that just because you have been sent a loan agreement by the lender, you are then obliged to accept it. You have the choice to either accept the offer or not. You should also take the time to read the agreement and review everything that it contains. Lenders are actually required to give you enough time to pore through the conditions and decide for yourself if you would want to pursue with the loan or not.
Cancelling a credit agreement
You have the right to cancel any credit agreement before you sign it. You are also given the chance to cancel it within 14 days from signing it. Also referred to as the cooling off period, this should give you the chance to ponder whether the loan is something you’d want to pursue or not.
When cancelling a loan agreement, you are not obliged to provide the lender with a reason. All you need to do is tell the lender about your decision. To give them notice, it is best that you do it in writing in order to have a record. You will also want to keep your own copy in the event that you might need it later.
You may also cancel the agreement verbally. This is especially true of the 14 day cooling off period is about to expire. It is important though that you keep a record of when you called, the exact date and time, as well as who you spoke to. This way, it would be easier to get proof that you have indeed talked to someone about your decision to decline the loan offer.
Paying Off a Loan with a Credit Card
Many borrowers experience problems in keeping up with loan payments. Some simply want to consolidate debt so that they only need to keep track of one debt. In general, a credit card can be used to pay off a personal loan, but this still depends on the situation. Before you decide to pay off your loan using your credit card, it is important to assess whether doing so can help you handle your finances better, or if this will further bury you in debt.
Credit cards are also debt instruments so every time you charge a purchase or bill to your credit card, you are taking out a loan. Credit cards are known to have high interest rates so you have to weigh carefully if you are indeed saving money by transferring your loan debt there. Remember that if you only pay your credit card’s monthly minimum amount due, your outstanding balance continues to accrue interest.
Risks It Involves
Another problem with paying off a loan with a credit card is that some lenders are not exactly comfortable with such method, or they are simply not equipped to process credit card payments. In case you have decided to pay off the loan using your credit card, make sure to inform the lender first.
If you want to settle your loan simply because you are close to missing and defaulting loan payments, talk to your lender so you can work it out with them. Although lenders are not happy to hear about borrowers missing payments, they will be glad to know you are trying to work out a payment plan to settle your loan.