Everybody needs a loan at some point in their life. A person might need a loan for a variety of reasons. Whether this is to kickstart your company or keep your life afloat during times of distress, there are many reasons when a loan can come in handy. However, a lot of people are put off by the thought of applying for a loan, as there are some common misconceptions about the application process, and how you must pay your loan back. You should never be deterred from accepting a loan if you need one, so you should read some important advice. It will help you decide if a loan is right for you, and put your mind at ease about borrowing.
How much can you borrow?
How much you wish to borrow depends on what you are using your loan for. If you are borrowing money to pay for a house, this can be up to tens of thousands of pounds. If you are hoping for a personal loan to keep you going until payday, you may only be able to borrow as much as £3000, depending on which loan provider you choose to go with. If you wish to borrow between £1,000 – £15,000, a guarantor loan may be the best option for your situation. Before you borrow, you should always assess how much you need, as you don’t want to apply for a larger amount, only to struggle with paying it back in future months.
How quickly can you receive a loan?
When you are applying for a loan from a bank or the government, the application process can take a long time, and there is no guarantee you will receive the amount you have applied for. It means you could be waiting up to a few months to receive your money, which is not ideal if you need the money quickly. Other loan choices involve getting instant cash from trusted online lenders, where you can have the money in your bank account in less than ten minutes. Online loan providers may also be able to answer any questions you have about the loan and the process directly on their website.
Are interest rates high?
One of the biggest things which put people off borrowing money from places other than banks is the traditionally higher interest rates. With some quick loan companies creating scandals recently due to sky-high rates that are impossible to pay, there has been an effort for other loan providers to take a more ethical approach to lending. In fact, there is now a whole range of both bank loans and quick loans which take a more empathetic standpoint on how they ask people to pay back their loans.
When must you pay it back?
Just as with how much you borrow, the time in which you must pay your loan back depends on which company you are borrowing from, and how much you have borrowed. Most personal loans are paid back differently to mortgages. It must be noted that some companies allow you to spread your payments over the course of a few months, separating how much you owe into small, manageable chunks with fair interest rates. Others may request the money to be paid back in a short amount of time before interest rates rise.