Applying to a direct lender for a short-term loan is easier to repay because payments are spread out for up to six months. This differs from pay day loans in that those are paid in one lump sum. That is difficult for some customers. Both loans have very high interest rates and high penalty fees for late or partial payments. The payday version of a fast loan can result in serious financial situations. Late fees and added interest compound payment expectations.
These UK loans are paid back based on the pay schedule of the customer. People who are paid weekly, for example, will have twenty-four equal payments over a six-month term. People paid monthly will have six payments. Most lenders have customers sign authorization forms that allow the lender to automatically take money out of checking accounts.
Experienced lenders, such as MoneyBoat UK, will explain the process in detail and include every payment amount and date on the agreements signed by customers. Email reminders are typically sent a few days before withdrawals so customers can prepare. Many people find this alternative manageable and use it more than once. It is not ideal due to the costs, but some people do not have another alternative.
Some lenders have so many repeat customers they have developed reward programs. After loans have been successfully completed, customers can apply for free entry into programs. Keep in mind that ‘successfully completed’ means every payment was in full and on time for the duration of the loan. Once two loans have been completed, customers are rewarded with the opportunity to borrow more money for longer terms.
In some programs, interest rates drop slightly at each new level. There is a cap on the maximum amount of money that will be approved at any one time. Term limits are clearly noted for each level as well. This concept is just catching on with direct lenders so check the website to discover if a lender does have a program in place.
Reducing Dependence on Loans
Responsible lenders provide customers with tips, strategies, and information regarding resources to help with money management. A credit counseling agency, for example, will make payment arrangements with creditors to pay down debt and overdue bills. Formulating a budget is a reliable way of controlling spending and saving a bit of money for emergencies. Find articles and tips at moneyboat.co.uk to begin reducing dependence on loans.