Sometimes, the monthly paycheck is not enough. Whether you receive an unexpectedly large utility bill or a have to pay for a medical prescription, being able to quickly borrow a few hundred pounds can be a lifesaver. Unfortunately, most banks do not offer short-term loans other than the payday advances that come with a large number of taxes and fees. In some cases, banks may not even offer the amount of money that you need if you have a poor credit score.
If you find yourself in need of a small financial boost, then you may want to look for other ways to borrow money, such as one of the many online services that are currently available throughout the United Kingdom. These platforms allow you to borrow small amounts of money for up to 3 months without any sort of financial verification.
Here’s what you need to know and to do in order to get a short-term loan without having to pass a credit score check.
Step 1 – Know what options you’ve got
There are several options to choose from when it comes to money-lending services, each with their separate advantages and disadvantages.
Depending on how much money you need, there is the option to:
- Register on a Peer-to-Peer Lending platform – These allow you to borrow money directly from another registered user. The platform only ensures that the transaction goes through smoothly and that everyone keeps their end of the bargain;
- Use a crowdfunding service – While not technically a loan, it is possible to ask the whole userbase of the platform to contribute with money in order to help you with a particular project. Crowdfunding platforms are usually preferred by those who have very specific goals that require large sums of money;
- Commercial lending platforms – These are websites that act as banking interfaces between the users that need to borrow money and groups of private creditors. They operate similarly to banks, with the exception that the approval process takes considerably less time and the money transfer is not reported to any credit score registers;
All of these allow you to loan small amounts of money, usually up to 500 pounds, without having to pass a credit score check. Furthermore, in most cases, you will also be able to download an app that will help streamline the registration process and help you keep track of how much money you have received, how much you have to give back and when the deadline is.
Step 2 – Find the best service for you
Not all of these services are suited for everyone. It is important to understand what kind of financing they were designed for.
Peer-to-Peer lending platforms tend to be more personal, in the sense that it is possible to get in touch with the lender and work out the details of the transaction. The service only matches borrowers with lenders and takes out a small commission. This type of service is more flexible than others in the sense that there are no preset monthly interest rates or hidden fees that you must pay in case you miss a monthly payment.
Crowdfunding services, on the other hand, are somewhat more rigid due to the fact that you may only ask for money for very specific purposes and there is no guarantee that the community will invest in your idea. These services are more suited for individuals who need money to develop products or services that they can then sell.
Lastly, there are the commercial lending platforms. These have fixed rules and regulations that you must agree to before requesting a loan and manage the transaction in the same way as banks do. They give you the loan and set up a monthly installment system that you must follow in order to pay the money back. If you miss a monthly payment, you will have to pay an additional fee.
Step 3 – Make an informed decision
Keep in mind that all three types of online money-lending services can be used in order to borrow money regardless of your credit score. This having been said, some platforms will ask you to provide extensive private information, such as proof of identity, proof of income, and proof of address, before agreeing to give you the money that you need.
Furthermore, some of these platforms are more rigid than others, which means that if you cannot return the money on time, you will be penalized, which may result in you having to pay a larger amount of money than initially agreed upon.
This having been said, if you need a short-term loan, you may choose one of these platforms and borrow the money. Look at the options that are available in your area, decide which one suits your needs, and plan before borrowing the money.Continue Reading...
Do you have a brilliant business idea, but do not have enough financial resources to start it? UK residents who have sound business concepts can easily find financial backing through small business loans. You can borrow up to 500,000 British pounds to start your business rolling. However, knowing what kind of loan you must take can help you consider several options and come up with a wise decision.
Here are the things that you must know about borrowing money to start or add capital to your business in the UK.
Type of Small Business Loans
There are two types of loans that you can take for your business. You can opt for a short-term loan or a medium to long-term investment.
A short term loan is an excellent option for small businesses that are having financial difficulties and may need cash to cover all its expenses. You might not have time to wait for a bank to approve your application. For speedy approval and same-day release of the money that you want to borrow, you can get a business credit card or ask your bank to let you withdraw money from the business bank account beyond the amount that your account has. Using these short term solutions can help you continue doing business and stay afloat until your company can recover financially.
Before you can borrow money using any of these options, you must show the lenders that your business assets can cover for the loan amount you applied. You can get as high as 50,000 pounds without collateral if your business performance meets the lender’s criteria.
There are also finance companies that would purchase the materials you need and lease them to your business. You rent the equipment instead of borrowing money from the lender to procure them. One advantage of this arrangement is your business is not affected by the depreciation of these materials.
You can also check the P2P lending or person to person lending. You can seek financing from another person or group of persons that lend money to business owners that need a boost to their capital.
Medium to Long Term Loans
When you are planning to start a business, you need a considerable amount of money for capital and keeping your business going until it can earn profits. The usual length of time for repayment is seven years. Although you can borrow an amount that is several times higher than the short-term credit, you can spread the payment over several years. This arrangement makes the monthly installments easy to pay.
Medium to Long-Term small business loans has several advantages, though. One advantage is the lower repayment. The overall interest right can be higher, but because the repayment period is long, it has become hardly noticeable.
Another advantage of the medium to long term loans is that you can make long-term plans for your business. Having enough funds to finance your business venture for several years gives you enough time to make everything work and enable your business to make some profit. By observing proper budgeting, the money you borrowed to start the operations can go a long way.
While extended repayment plan and high-interest rate can be a set- back when getting a medium to a long-term loan, it can still provide a start-up business the time and financial capability to grow.
Business Account Overdraft
For a business that is already operational, getting a business account overdraft can provide short-term solutions to your financial needs. With this kind of small business loan, a business owner can withdraw an amount beyond what is actually in the business account. He must repay it within 12 months. Then, he can borrow again if there is a need. If the business is now doing well, he can stop borrowing using this scheme.
Evergreen Loan or Credit Cards
Businesses can use credit cards to provide an additional source of funds for the company to operate well and grow. Although there is no interest in the beginning, it can cost high in terms of interest after the free period.
Several trusted financial institutions in the UK provide small business loans, and they charge low-interest rates. One bank can lend money up to 1,000,000 British pounds. After the bank approves the loan, the fund is released immediately. These financial institutions also have a long-term repayment plan. If the term is ten years, a borrower must make sure he pays off everything in the 10th year. Early repayment of debts is against the policy. The bank can penalize a client that pays in advance.
If you own a business that requires more capital for it to work seamlessly, getting a small business loan in the UK is an excellent option. As long as you observe the terms and conditions and make payments on time, you can get all the financial help you need to grow your business.Continue Reading...