What are the Different Repayment Terms for Short Term Loans

There are a number of different ways short term loans can be repaid nowadays. Lenders offering short term loans now place a great amount of focus on the ability to offer a lending resource which is fair and consumer focused and with this comes the need to offer a loan which is flexible. Short term loans are designed to offer a lending tool to a specific set of requirements and do not offer the same style of loans as that offered by say a credit card provider. Where a credit card provider will allow an applicant access to a on-going resource; should they be approved, short term loans are really only designed to be used over a short term basis. As the name of these loans suggests, borrowing from these online lenders is not designed to be an ongoing point of borrowing and is therefore completely different to a more traditional loan we may be used too.

Short term loans in the modern market are offered to consumers through a simple and easy to follow application process which ultimately lends to the ability to borrow a reasonable ‘small’ sum of money to be repaid in an agreed period of time. This period of time for which the loan will be repaid is often decided by the applicant at the point of submitting the application, when the lender will offer a number of repayment terms. These repayment terms will of course vary depending on the lender in question and the amount which is being applied for. So for a customer looking to literally borrow £50.00, it is unlikely the vast majority of lenders will offer the same terms as that of their larger value loans. Equally with this in mind it is unlikely a lender will allow their customer the ability to borrow £500.00 to be repaid as a lump sum with interest in a single repayment, as for many, the same of this repayment may proof too costly.

The great news is as part of the application process for short term loans, lenders nowadays, will help you decide which sort of repayment term may be most suitable. This is determined by assessing the applicant’s affordability. This means they will review all the information which is available and make an informed decision. A lender of short term loans will achieve this in a number of different ways. One such method for understanding what would be suitable is the use of a full review of your current credit reference file. Lenders will review your existing financial commitments alongside their proposed borrowing resource to ensure overall, that the loan would be affordable. As well as a credit review lenders will now ask that you complete a budget plan as plan of applying. A personal budget will allow the lender to better understand if short term loans are really a suitable choice. This means it is very important that when applying for short term loans it is done in a manner which is honest and also accurate.