Monday, January 27, 2014

Text Loans Direct Lenders - Advantages and Disadvantages

We've all been there, it's a week before payday and suddenly the car breaks down. Obviously the repairs have to be done as you can't be without your vehicle for very long, but where on earth do you get the money from? These days, needing to get hold of extra emergency cash isn't such a disaster, especially with short-term loans such as text loans and payday lenders becoming more and more popular.
A text loan works as you would imagine, a short-term loan that you can request via an SMS message on your mobile phone. They are a financial lifeline should you need one and mean that if you are ever caught short and need to access emergency cash, you can. And like all loans, text borrowing has its advantages and disadvantages so thinking carefully through all your options before you choose one is a definite must.
The great thing about a text loan is that it is for all intents and purposes a really quick and easy way to get your hands on some cash. Most providers offer to advance the money you requested straight to you the same day, often within hours or minutes of receiving your text. Other advantages are a less complicated application process and not quite so stringent criteria to meet than with many of the high street lenders. For those who have a bad credit rating, this isn't such a bad thing. Lenders will simply want to know that you have a regular form of income and will be able to repay the amount borrowed without any problems.
Text loans direct lenders work by first becoming a customer of the loan company, once approved you are then able to ask for a loan via a text message at any time. Applying for a text loan is usually done online, where you will be asked a few questions about your current financial situation. Lenders are looking to see that you have regular employment and wages coming in, as well as confirming that you hold a UK based bank account.
As a customer, you are free to text for a loan whenever you find yourself short on funds for any reason. Really useful if you encounter unexpected bills such as expensive dental work or your washing machine breaks down and you need to pay for repairs. However, there are certain disadvantages to using text borrowing, starting with the high interest rates that they carry. Due to the loans being smaller than usual lending and because the repayment time period is relatively short, interest rates will be a lot higher than normal high street loans, making them quite pricey in the long-term.
You need to be sure you can comfortably pay the amount back at payday, if not, missed payments will incur steep charges and can affect your credit rating going forward. The danger of text borrowing is that it is far too easy to use and you start to rely on a loan every month, never actually catching up with repayments. Adding more and more interest payments each month is a sure fire way of spiraling into long-term debt.



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