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Published 2016-11-17 07:00:00

Principal Differences between Banks and Private Lenders

There are secured loans and unsecured loans. There are loans requiring cosigners and others require guarantors. There are loans for people who have a certain credit history and some loans don’t factor in credit scores at all. There are short term loans that you can repay in two years or twelve months. There are payday loans that you have to repay in onetime lump sum payment when you get your paycheck. There are innumerable lenders in both secured and unsecured lending industry, you will get a plethora of choices and you should make an informed decision. The trick is to identify what is the best bet given your circumstances.

Let us confine our choices to short term loans like payday loans or smart loans for specificity.

You will get payday loans requiring a onetime repayment. You will have short term loans which are also payday loans but you will get a longer repayment period. You could get three months or even a year. There are some smart loans allowing you to repay over twenty four months. You need to choose the right repayment term and that should directly depend on your disposable income and loan amount. In effect, the amount of money you need to repay will influence your decision.

The rate of interest is another factor. When you are repaying at a very high rate of interest, it doesn’t make any sense to opt for a very long repayment period within the realm of short term loans in UK. The longer you take, the more interests you shall pay. Cut it short, squeeze your budget, hold back a few expenses for some months and get over the substantial financial obligation.

Always look for early repayments regardless of the type of smart loans you opt for. This will save you some interest and you can get back to your normal saving schedule sooner.

Warning: Late repayments can cause you serious money problems. For help, go to moneyadviceservice.org.uk