No matter how carefully you plan and save, there will always be situations where a financial boost can be a welcome addition in helping you to achieve your goals. Whether it’s home improvements, debt consolidation, or simply a bit of extra cash to tide you over until payday, there are plenty of flexible loan types available to suit your circumstances.
Let’s take a look at some of the most popular loans which are taken out by customers across the UK, and how you can apply for loans online with a minimum of fuss.
How Do Loans Work?
No matter what type of loan you decide to take out, they’ll all follow the same general principles of lending you a lump sum which is repaid in instalments over a pre-agreed period of time. The amount that you repay will usually depend on the interest rate that comes with your loan, the length of the credit agreement, your credit score and financial circumstances.
Once the terms of your loan have been agreed, you’ll be issued with a credit agreement which will outline exactly how much you’ll need to repay each month, any applicable fees, the start date and end date.
Keeping on top of your repayments will help you to improve your credit score, increasing the chances of being approved for credit and receiving more favourable interest rates in the future.
What Online Loans Are Available?
There’s a wide selection of online loans available at Creditraters.com for those looking to boost their personal finances. It’s important to understand how each one works in order to help you choose the best possible option for your circumstances.
Personal loans are amongst the most flexible loan types available to borrowers. This broad term is used to describe any form of lump sum borrowing which an individual can use for a variety of purposes including debt consolidation, home improvements, purchases, holidays and much, much more.
As with most loan types, personal loans are issued on either a secured or unsecured basis. A secured loan means that you’ll need to use collateral, such as your home, car or other assets of value, as security. This reduces the risk to the lender which will increase your chances of acceptance and potentially lower the amount of interest that you’ll pay.
Unsecured loans do not require any security whatsoever, however the lender will be providing you with funds based on your credit score and ability to repay the loan. Since they won’t have any added protection should you default, you may find these loans slightly harder to come by or that they are charged at a higher rate of interest.
Payday loans have been a major player in the short term loans market for some time. They have experienced a dramatic resurgence in recent years thanks to their high levels of acceptance, relatively low borrowing amounts and the sheer number of companies now offering them.
Payday loans are generally used to cover life’s little emergencies rather than providing a long term borrowing solution. Once a successful application has been submitted, funds are typically transferred within just a few hours and the balance is then repaid on your next payday. This repayment can be extended over a couple of paydays to provide some added flexibility.
Although they tend to come with high rates of interest, the short term nature of this lending stream means that you won’t be hit with excessive repayment amounts as long as your original balance is repaid on time.
Short Term Loans
Short term loans often get pigeon holed in the same bracket as payday loans, however it should be the other way around. All payday loans are short term loans, but not all short term loans are payday loans.
A short term loan is any form of borrowing which is to repaid over a few weeks or months rather than years. Rather than repaying your borrowed amount in full on payday, repayments are structured in a similar way to personal loans in that you’ll have a fixed repayment plan in place that is created irrespective of your future pay dates.
There are many different ways in which assets can be used as security to get a great deal on online loans. One of those is to use your vehicle via a logbook loans.
With logbook loans, you’ll temporarily assign the ownership of your vehicle across to the lender, although you’ll still have full use and access to the vehicle for the entire duration of your loan agreement.
Once the loan has been repaid in full, you’ll recover the legal ownership of your car, van or motorbike since there’ll be no further financial risk to the lender. Although every loan is different, logbook loans will typically be used for short to mid term funding of up to 18 months, however there are lenders who specialise in shorter and longer terms than this.
With more than 25 million cars on UK roads, car loans are amongst the most common borrowing types taken out by British consumers. In essence, it’s a personal loans which has to be used to fund the purchase of a new vehicle and is repaid monthly, with interest.
Unlike logbook loans, the car is not used as security, although there are some companies which do offer this as an option. Using the purchased vehicle as collateral is a great way to increase your chances of acceptance as well as improving the interest rate that you’ll receive.
Applying for these online loans has never been easier thanks to comparison services such as Creditraters.com. Simply complete a few basic personal details and let us know why you’re looking to take out finance, and we’ll compare loans on your behalf from a wide selection of mainstream and independent lenders.