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- Quick Loans: Everything You Need to Know
When you need money and don't have the time to wait around, you might want to consider quick loans, also known as payday loans. A type of borrowing that's not just speedy and convenient, but well regulated and trustworthy too, quick cash loans make it possible to get the money you need without delay.
They often come in the form of payday loans, but this isn’t always the case. There are various types of quick, easy loans that offer different options. Here’s a closer look at quick loans and everything you need to know.
What Are Quick Loans?
Many people will be more familiar with the term "quick cash payday loans" but they refer to more or less the same type of product.
Traditional borrowing involves longwinded and complicated paperwork, with a decision process that can take some time. In direct contrast, quick money loans have an application format which is concise and convenient, often providing an instant answer.
Quick online loans are typically for a smaller amount, allowing the number of questions to be shortened. This makes them very useful when cash is needed quickly, such as paying an unexpected expense.
Due to the lower sums involved, the repayment term is typically fairly brief as well. This may be repayment in full via a lump sum at the end of the month, or it could be via small instalments. Quick and easy loans can be paid off in full at any time, and it’s common to do so, another feature which sets them aside from other types of borrowing.
Why Take Out A Quick Loan?
It’s important to understand that quick personal loans are very different than traditions forms of borrowing and won’t always be right for your circumstances. If you’re hoping to borrow a large sum of money to buy a car, for example, a quick small loan is unlikely to be suitable for your needs.
Here are some of the most common reasons why people take out a quick pay day loan:
- Short-term cash flow problem
- Emergency money required to pay for an unexpected cost
- Avoiding debt. Rather than incur late payment charges and end up with a negative entry on your credit rating, a quick loan can be taken out
- Holiday spending money
- Improve credit rating
Quick loans in the UK are not suited to long-term borrowing needs, but are ideal for those occasions when you just need a little bit of help temporarily. This could be an occasion when you want more cash, such as a holiday or big occasion, or it could be because the car has suddenly broken down or your boiler has blown up.
A reputable lender won’t encourage their borrowers to take out bigger loans than they can afford, nor to apply for quick pay loans for purposes they’re not suitable for. For more information about the different types of borrowing, take a look at Should I Get A Credit Card Or Quick Loan?
How Do I Apply?
One of the main features of a quick loan is the ease of application. Even if you’ve got bad credit the process is swift with no complicated questions.
The majority of these loans are made online where you’ll just need to enter a few details. Once you’ve filled in the form, you can click to apply straight away and for the majority of cases, you’ll receive an instant decision.
If you’re accepted for a quick cash loan, you should receive the money the same day. Just like applying, there’s no hanging around or delays and you’ll find the cash hits your bank account within hours. This speedy payout is one of the biggest advantages of a quick loan, giving you the flexibility to manage your bills as and when they arise.
Is The Money Guaranteed?
The chances are that if you need a quality quick loan, you'll want the money pretty quickly so knowing in advance whether you'll get agreed or not is vital.
Like any kind of loan, there’s a process that must be followed when you apply. This includes specifying the amount you want to borrow as well as providing personal details. Depending on your answers, you’ll be either accepted or refused, it’s as simple as that.
No-one is guaranteed to be approved for a quick loan, but if you have a good credit record, there's a much better likelihood of being accepted. If you have a bad credit history, it doesn't mean you won't be accepted, and there are some lenders that specialise in providing bad credit quick cash loans.
Every lender will also have its own lending criteria which you may or may not qualify for. As an absolute minimum, you will usually have to be at least 18 years of age, a UK resident and hold a bank account in the UK. Most lenders will also expect borrowers to be in full-time employment. Some lenders will have additional criteria in addition to these basic requirements, so it's a case of checking to see if you can match.
How Much Can I Borrow With a Quick Cash Loan?
Every lender will have their own limits, but these loans aren’t designed to provide vast sums. With the reduced application process and speedy payouts, they typically provide much smaller sums of money than more traditional forms of borrowing.
The amount you can borrow will also depend on how much you’re able to repay. Affordability checks will help to identify how much you can repay, and the figure you can borrow will be based on this. Many lenders offer online calculators so potential customers can see how much it will cost to borrow money.
Depending on affordability, it's not unusual for quick click loans to be limited to around £2000. This figure can be lower for some lenders, and if you're a new customer, your first loan may be restricted further. If you prove to be a reliable borrower, you will normally qualify for higher sums for any subsequent quick loans.
What Should Be Considered?
Like any form of borrowing, there are big differences in what’s offered from one company to another and it’s essential to look at the different terms before finally committing to a single lender.
For most people the deciding factor is the cost; this means the amount they need to repay each month, or the total repayment due. These figures will include the interest charged and every lender will add a different amount. It is therefore undoubtedly important to find the most competitive quote by comparing the market.
However, there are many other factors which can also influence the overall cost and these can be found in the terms and conditions. Late payment fees are one example of this and in some cases, the charges can be hefty. When deciding on a lender, don’t simply go with the cheapest on the calculator, take the hidden costs into account too and you won’t end up with a nasty shock later on.
Are Quick Loans Safe?
In the UK, any company which provides finance or loans is regulated by the Financial Conduct Authority (FCA). This provides customers with a certain degree of safety as the company must follow a code of conduct.
Therefore, when taking out quick finance loans you should always check that the FCA logo is being displayed. If the lender isn’t a large or well-known company, it’s a good idea to make sure they are legitimate and allowed to trade. The FCA register is available for the general public to view for free at any time online.
How Can I Find The Right Quick Loan Lender?
There are lots of different lenders offering quick unsecured loans so you might find it difficult to know exactly who to apply to. However there are certain criteria you can look for to help narrow the market down to the best lenders.
Some of the factors you might want to look for include:
- Confirmation that the lender is authorised and regulated by the Financial Conduct Authority, together with their reference number for the register
- A full business name trading address and contact details
- A clear and well-written site. If you find lots of spelling mistakes or grammatical errors, the lender may not be the reputable company you’re looking for
- Secure technology for when you’re submitting sensitive data. Don’t provide your confidential details on a site that isn’t encrypted and secure
- Inclusion in comparison sites. Lenders who appear in comparison sites are far more likely to be legitimate operators.
The above factors will help you ascertain if the lender is a reputable and legitimate company which is the most important thing. However, once you’re sure that the lenders you’re considering are trustworthy, you might want to go on to choose the one that offers the best products. To do this, consider the following:
- Can you repay the loan early without penalty?
- Does the lender feature on Trustpilot or other sites which feature independent reviews?
- Can you manage your loan online?
- What are the charges if you’re late or miss a payment?
- Do you meet their minimum lending criteria? If you’re looking for something specific such as a bad credit quick loan, you might qualify for fewer lenders.
Is A Quick Cash Loan Right For Me?
Quick loans are very different from traditional finance and can be useful in certain circumstances. However, it’s important to be fully aware of the benefits and the disadvantages too so you can decide whether this is the type of finance that you want to apply for.
The main advantages of taking out a quick loan are:
- Easy to apply
- Short application process
- The ability to borrow small sums
- Short repayment period
- Greater chance of being accepted
- Fast payout
- Perfect for bridging a short-term cashflow problem
- Provides protection to your credit rating by preventing you from defaulting on payments
- Fully regulated in the UK
- Available around the clock; many payday lenders offer a 24/7 application process
- Perfect for those who have never borrowed before
Although there are many undoubted benefits, there are some disadvantages to take into account too.The main ones are as follows:
- Only relatively small sums can be borrowed
- Short repayment term; not ideal if you’re hoping to keep repayments low over an extended period of time
- Hefty charges can be added
- Much higher interest rate than traditional borrowing
- Easy to fall into a cycle of borrowing
Only you can decide whether a quick loan is right for your circumstances, but you'll need to consider all of the above factors before reaching a decision.
Take Your Time
You might be in a rush to receive the cash but don’t let the urgency of your financial situation push you into making a poor decision. Lenders who provide quick UK loans have received lots of bad press in the past. However, on the whole, the ones who are still operating have cleaned up their act and now meet the standards set out by the FCA, something that wasn’t the case before.
It won’t take much longer to check through the various lenders rather than just plumping for the first one you find. If you’re having financial difficulties which are more than just a temporary problem, you might want to consider getting debt advice rather than taking out further finance. If you take out a quick loan and don’t meet your repayments on time, your credit rating will suffer as a result, making borrowing more difficult and expensive in the future. Creditors will usually be very happy to work with you to create an alternative repayment schedule if you are in financial difficulty, so don’t feel that a quick loan is your only way out.
If your cashflow shortfall is due to an unexpected cost, or just a temporary blip, a quick loan could be exactly what you need. Follow the fast quick loans checklist and you should find lending that suits your circumstances perfectly.