Here some of your classic questions on short term finance are examined and some sample responses provided.
Where can I get hold of money quickly and safely?
Perhaps the obvious answer is to use a well-known provider of fast loans as such as Wonga.com.
You might also have some other alternatives including:
- your bank;
- friends or family members;
- some of the various fast-cash outlets that may be called a number of things but which are very similar to pawn brokers.
There are different pros and cons with all of the above but one thing that you should not do is to go to an unlicensed backstreet lender (sometimes known as loan sharks).
What interest rate will I pay?
The calculation of interest rate isn’t easy though you can find a quick guide here.
Most borrowers will typically not be bothered much about the higher mathematics or philosophy behind interest rates but only how much they will need to pay before the loan is paid off. That may vary very much depending upon how much you borrow, who you borrowed it from and over what period of time.
Of course, the percentage interest rates they charge will also be a significant factor.
In terms of most fast and short-term loans, annual interest rates can be occasionally misleading. The provider may be obliged to quote an annual rate (AER) by law but it should be remembered that these types of advances are typically aimed at being repaid within relatively short periods of time and not a year or more.
By law, any lender must make clear how much interest you will be paying overall and you should compare one offer against another closely in that respect.
Can I get a loan if I have a poor credit history?
Typically yes but there may be a few things to keep in mind.
Any lender may reserve the right to refuse a loan application in circumstances where your credit history is particularly bad. It is impossible to generalise further as much will depend upon your exact circumstances.
However, some lenders will consider applications from people with less than perfect credit histories. You may need to be realistic though and assume that in such cases you will need to pay more in interest rate terms for your loan than someone with a better credit history.
The only way to be sure what will apply in your particular case is to speak to a provider or two.
What is a secured loan?
In general terms, loans are either secured or unsecured.
In the case of a secured loan, you will normally offer some form of asset (e.g. a house or car etc.) to guarantee your loan. In the event you failed to repay the loan, the lender may have a legal right to seize your asset for sale to recover their money.
Unsecured loans typically do not offer any asset as guarantee but you should be clear that the lender would be able to take legal action for the recovery of any sums lent should you fail to repay them in line with the agreement.
Secured loans are typically for larger sums borrowed over longer periods of time. They may also take time to set up and arrange, as the legal formalities may be a little more complex.