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Best Situations To Use A Short Term Loan

Need a little extra cash, but not sure if your reasons warrant the loan application? Don’t worry, millions of people around the world wonder whether its best to take out a personal loan or struggle through the tough financial times. Of course, there are ups and downs to both options. We examine the best situations to use a short term loan.

Best Situations To Use A Short Term Loan – Stats

According to the stats released by Statista, consumer lending in the UK averages on around 22.8 billion pounds per year. Consumer lending is typically done via a short term loan or a payday loan as it is often called. According to recent stats released by Finder, most payday loans range from £100 – £1000 with £260 being the most common amount loaned. Most loan applicants taking out loans of this size would do so at least six times over a 12 month period. When you consider how frequent these short term loans are being applied for, you might be interested to find out what people in the UK are using their short term loans for. How do your reasons for a short term loan application compare to other applicants in the UK.

Personal credit checks determine the size of your loan

When applying for a short term loan, as per the financial conduct authority, your current credit rating will affect the outcome of your application and also determine how much you are able to loan. The loan terms and conditions will also depend on your financial history. The better your credit rating is, the more you will be able to loan and the better the terms will be.

 

Best Situations To Use A Short Term Loan – Top Uses for Short Term Loans in the UK

The stats show that most people who get short term loans in the UK use the money for the following reasons:

  • Household bills
  • Purchase cars/transport
  • New furniture
  • Home improvements
  • Unexpected emergencies

Of course, these are not the only ways you can spend a short term loan. Below are three ways in which you can use a short term personal loan wisely.

Monthly shortfall to replace an appliance/furniture

While it might be tempting to take out a short term loan to furnish your home with trendy appliances and furniture, that is not a wise idea. A scenario where using a short term loan is viable is if an essential appliance or furniture item breaks or malfunctions, such as a fridge. If your fridge breaks, you won’t be prepared for the unexpected expense and you can’t live without a fridge, so the personal loan makes sense.

 

To protect your safety by means of car servicing and repairs

If you don’t have the cash to service your car or have that nagging rattle sorted out, you could have an accident and face even larger expenses, not to mention the risk of injury or death. If you are unable to afford the upcoming service or the repair service, consider applying for a personal loan.

Best Situations To Use A Short Term Loan – To cover unexpected expenses

Ever started studying a course and completely overlooked the fact that you need to buy text books and study materials? A short term personal loan can help you out of a sticky situation and ensure that you can cover the odds and ends that you had not planned on otherwise.

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