Various Loan Types That Can Make Your Life Easier During Financial Emergencies

Short-term loans are offered by traditional money lenders at a high-interest rate. This loan can be used for any purpose, like repayment of a mortgage, medical bills, tuition fees, wedding arrangement, fighting for a case in the court, etc. The reason people go for short term loans is due to its simple and quick process. Instead of standing in queue for hours and waiting for months to get a loan, everything is one online and within 2 – 3 days money is automatically transferred to the account.

Loanpig.co.uk provides short term loans which are also known as payday loans. Their application process is fast, simple, and convenient. If your application doesn’t go through, still they will look for a lender that matches your requirements. They follow the regulations of FCA, therefore all fees and charges along with rate are clearly mentioned on their website.

Loans can be of any form. It can be quite confusing for people to decide what kind of loan is good for them. We have a list of different loans, which can help you in the future –

Family and Friends

This is the easiest way of getting money for financial emergencies. Families and friends can always help with small amounts. The advantage of getting temporary loans from them is that you don’t have to pay any interest rate or late charges. It all depends on your relationship with that person. However, avoid taking a large sum of money and avoid awkward situations for a small amount as well, unless it isn’t necessary.

Payday Loans and Short Term Loans

As we have discussed above, it is quick and simple to get from lenders. You have to apply online and they contact you at your email address provided. In the email they will ask to fill up a few forms and requests for documents like employer’s name, driver’s license for age confirmation, salary slip to check if you can afford the repayment, bank details because all transactions will be done online, and many other documents.

Once you submit all the documents, they verify information and check your credit score, then approve or disapprove your application. If approved, you’ll get money in few days directly in your account, and if disapproved, then try your luck with other lenders. The only drawback of this loan is its high-interest rate.

Credit Union Loans

It is a non-profit organization that offers loans to those who have been rejected by financial institutions and other lenders. However, they have their criteria that have to be met to get an approved loan. It is another best option after short term loans, but everyone isn’t eligible for it.

Credit Card

Credit cards are good options for emergencies, but we often take plastic cards as a mode for shopping, dining, parties, travel bookings, etc. We always misuse credit cards and end up with huge bills. Later, we’re unable to pay the whole amount and end up with different financial and late charges. The interest rate for normal expenses in a credit card is less, compared to a cash advance.

Authorized Overdraft

There is always an authorized overdraft amount in a bank, which can be taken out anytime. You can withdraw a certain amount from your bank account to a certain limit over the bank balance. However, you will be charged a fine every day till the time your account is negative. This fee can be a burden if you’re unable to meet the limit again. However, some banks allow overdrafts with a 0% rate.

When you have so many options then life can be simple. However, I still feel a loan is always a burden unless you’re repaying it on time. It is wise to always keep savings by cutting down expenses.

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