Short-term loans can be a great way to access funds, particularly if you need cash quickly. When you’re hit by an unexpected bill or unforeseen circumstances, a short-term loan can be the easiest way to find the funds you need.
However, many people assume they won’t be eligible to obtain this type of financing. Unfortunately, this means they are missing out on access to short-term funding opportunities. If you’re concerned that you won’t qualify for a short-term loan, find out how these common barriers can be overcome:
Bad Credit History
It’s easy to succumb to bad credit, particularly if you’ve had financial worries in the past. As lenders will assess your credit history before offering you a loan, it can severely limit your funding opportunities. Whilst bad credit might prevent you from getting a long-term loan, it needn’t stop you from accessing short-term financing.
Short-term loan providers typically have more generous eligibility criteria than traditional lenders. When you approach payday loans direct lenders, for example, you’ll notice they have high acceptance rates and flexible repayment options. This enables applicants to obtain the funding they need even if they have a bad credit history.
No Credit History
People often think that avoiding credit will stand them in good stead for the future, but this is rarely the case. In fact, trying to access credit with no credit history can be as difficult as getting a long-term loan with a credit history.
When you don’t have a credit history, lenders have nothing to base their lending decision on. As they can’t predict whether you’re be a reliable borrower, they’re less likely to offer you a loan. However, the majority of short-term loan providers look more favourably on applicants who have a limited credit history. Due to this flexible approach, a lack of credit history shouldn’t prevent you from obtaining a short-term payday loan.
When assessing a loan application, lenders will look closely at your income and outgoings. If you have a relatively low income, they may think you won’t be able to make your repayments on time. However, this doesn’t take into account short-term financing arrangements. As short-term loans are typically for less funding than a traditional loan, a low income won’t prevent you from making your repayments on time.
Although a low income can make it hard to borrow a sufficient amount from a traditional lender, short-term loan companies use a different range of criteria when assessing your application. As a result, you’re far more likely to be eligible for this type of funding opportunity.
Applying for a Short-term Loan
When you apply for a short-term loan, you can complete your application in a matter of minutes and submit it straight away. Generally, short-term loan providers will also accept your application very quickly, and there is minimal day when it comes to transferring the funds too.
With a super-fast application process and generous eligibility criteria, you needn’t let a bad credit history, a lack of credit history or a low income prevent you from accessing the funding you need.