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Living without borrowing in days world is getting increasingly more difficult. While many will borrow for their education, for a car, or for a home, it is also incredibly common for people need to borrow for other things. For example, if you live in a relatively expensive city like London it can be hard to remain afloat and you may need to borrow money to cover the cost of daily life.
However, if you only need a small amount of money to hold you over for a couple of months or need to pay for an unexpected expense, it doesn’t make sense to get a long term multi-year loan worth thousands and thousands of dollars. Thankfully, there are other options. Short term loans in London can help you get the money you need, without being stuck in debt for years.
Applying for a short-term personal loan? Avoid these common application mistakes.
What is a Short Term Loan?
Short term loans in London are helpful tools that can assist you with a wide variety of expenses, from emergencies to bills. A short term loan is essentially a smaller loan that is paid back over a short amount of time. These loans are generally paid back anywhere from a month up to a few years, but the payment schedule will differ from person to person.
In addition to a shorter term, the amounts borrowed are also quite small. These loans often range from $100 up to around $2000 or so. Because of the small borrowing amount and short term, these loans are usually easy to be approved for, and you will normally get your money in a few days or so. Of course, like any other loan, the amount of interest you pay on the loan will depend on things like your credit score, your financial situation, and the lender you work with.
What Can a Short Term Loan Be Used For?
Now that you know a little bit about short term loans in London Ontario, what can they be used for? Well the good thing about short term loans is that they can essentially be used for anything you need a little extra money for. Including:
- Emergencies (medical or financial)
- Unexpected travel
- To make large purchase
- To cover your bills
- To make home or car repairs
- To build credit
- To take a vacation
Generally, we recommend you use them for things that are incredibly important and cannot wait such as crucial home repairs, vehicle repairs, medical emergencies and other unforeseen circumstances. Remember, any amount that you borrow will need to be paid back in full plus interest, so be careful not to borrow for things you don’t really need.
Also, be sure you can afford to make payments on the amount that you borrow. The last thing you want to do is be stuck in a short term loan that you cannot afford to pay back. If you can wait a few weeks or months to save some money and purchase an item and don’t really need it right away, then you shouldn’t take out a short term loan to pay for it.
How to Get Approved For a Short Term Loan in London?
Now that you are aware of what these short term loans in London can be used for, you might be curious about how you can go about being approved for one. While many of us will use loans at one time or another, they aren’t always easy to be approved for, especially if your financial situation isn’t the best. Thankfully, there are some things you can do to help you not only get approved for a short term loan, but also get a better rate.
Check Your Credit Report
First of all, you should be sure to pull a copy of your credit report and ensure everything is okay (Want to learn how to read your credit report? Click here). Your credit history and score will be one of the biggest indicators whether you will be approved for a loan or not. It can also have an impact on the interest rate you get and how strict the loan is. You need to check your credit report for errors and ensure everything is correct and as it should be.
Work to Improve Your Credit
Next, you want to look to improve on your credit score if it’s low. As mentioned, a bad credit score could hurt your chances of getting a high quality short term loan. While it may not happen overnight, improving your credit score is definitely possible and there are many different things you can do to improve it. These include:
- Paying all your bills in full and on time
- Using your credit responsibly
- Keeping old credit accounts open
- Ensuring your credit utilization is low
- Not constantly applying for new credit
If you’re able to implement some of these habits into your life, you should see your credit begin to improve over time.
Find The Right Lender
After getting your credit score and credit report in check, you should look or the right lender. There are many lenders who can provide short term loans, but they are not all created equally. Some will offer different rates, have different packages and varying terms. The lender that works best for your needs and unique situation is the one you should go with. It’s important that you take time to shop around before you decide which lender you want to work with.
Tackle Any Debt You Might Have
Once the correct lender has been found, it’s time to start paying down any credit card debt you may have. When applying for a new loan, you want to get rid of as much debt as you have so you can afford paying down your new debt. Getting stuck with too many bills and payments every month can become quite difficult and confusing. When you have finally been approved for your loan, you need to create a budget. This will help you to stay on top of all of your payments and make sure you can keep up with them.
To learn how to manage any type of debt you might have, check out this article.
Pros and Cons of Short Term Loans
While short term loans in London can be a great tool for some people, they may not always work for everyone. As a result, it’s a good idea to know both the good and bad of short term loans before making a decision. With that in mind, this section will take a look at some pros and cons of short term loans to help you decide if they are right for you.
Pros of Short Term Loans
- You will get almost instant access to the funds you need
- You will likely be able to find a lender willing to work with you, even if you have subpar credit
- They can be a simple and less-risky way to build your credit
- There is no lengthy term to worry about
- Oftentimes, there is less paperwork to fill out and worry about
Cons of Short Term Loans
- They generally have a higher interest rate than loans with longer terms
- If you continually take them out, you could find yourself stuck in a cycle of debt
- You can only borrow relatively small amounts, which may not be enough for your needs
- They can potentially lead to bad financial habits if not used appropriately and responsibly
If you are curious if a short term loan works for your situation or lifestyle, don’t hesitate to reach out to Loans Canada or an expert in your area.
Finding the Right Short Term Loan For Your Needs
Think a short term loan in London is right for you and your needs? If so, be sure to reach out to Loans Canada. We are confident we can help get you set up with a great lender in your area.