The process of loans should be simple and straightforward. Most of the loans do have it, though. You borrow a small sum of money and pay it off once and for all on top of the interest charged. You are free from the debt on your next payday, how convenient it is, but when things are too good to be true, you should understand there is a red flag.
Small loans are very expensive when they are paid in full on the due date. The APR of these loans may be very high, up to 0.8% per day, which is 292% per annum. It means you will end up paying £392 if you roll over a £100 loan for an entire year.
Logically, you can say that you are not about to roll over, so there is no question about hefty interest payments. However, ask yourself how you will be able to pay off £115 on your next payday when you cannot pay £100 from your pocket outright.
Therefore, weekly loans are a better choice.
What are weekly loans?
Weekly loans are paid over weeks. Depending on their size, the repayment period could be up to 52 weeks. You are free to borrow between £200 and £2,000. One of the benefits of weekly loans is that you can extend the expense. Of course, it is easier to budget around weekly instalments than a lump sum payment.
Another advantage of these loans is that they can make your credit better. There are certain types of loans that you will be refused if you do not pass muster, but weekly paid loans are small loans, so your bad credit score may not get in your way, provided you can afford the debt.
As you pay down the debt over a fixed period of time, this will show your loyalty towards your financial obligations. If your lender reports your on-time payments to credit bureaus, your credit score will undoubtedly go up, but it does not mean older inquiries, missed payments and defaults will drop off.
What are the features of weekly loans?
Here are the features of weekly loans that make them a better alternative to other small emergency loans:
- Quick decision
Even though a hard credit check is run, getting approval does not take too long. The decision will be made immediately, and money will be deposited directly into your bank account.
Ensure you provide accurate details in the form because that plays a paramount role in determining the loan amount.
- No hidden fees
All loans are subject to some sort of fee. You will be responsible for paying processing or upfront fees, and some lenders will charge closing fees as well. However, you can get all details about the fee structure in your agreement. A lender will not charge hidden fees. In case of any queries about the fees, you can ask your lender before signing the agreement.
What can you use for weekly loans?
Weekly loans can be used for a myriad of expenses, and they do not have to be unexpected. Whether you need money for unforeseen expenses or planned expenses, the application procedure will be the same. You will pay down the debt in weekly instalments.
You can use weekly loans for the following purposes other than emergencies:
- You have bought a carpet.
- You need money to purchase a bed.
- You desire to purchase a piece of furniture.
- You desire to acknowledge a new mobile phone, a tablet or a washing machine.
What are the downsides of using with weekly loans?
Though weekly loans can come in handy for almost all purchases and help do up your credit file, they are also subject to some risks. At the time of applying for these loans, you should weigh up them so you do not rue the day down the line.
- Interest rates are high
Because these loans are paid down in instalments, it does not mean they offer attractive interest rates. These loans are generally aimed at bad credit borrowers so that interest rates will be high, but because they can help improve your credit score, they will improve your chances of borrowing money at a lower interest rate down the line.
- You can miss payments
Make sure you do not borrow more than your affordability. Otherwise, you will fall behind on payments. Once you miss the payment, interest will accrue over time, and the cost of the debt will undoubtedly go up. You will fall into an endless debt spiral if you do not bounce back.
How to apply for weekly loans?
Here are the steps that you will have to follow to apply for weekly loans:
- Grab your cellphone, visit the site of a weekly loan provider and fill in the application form.
- Provide details related to your financial condition. You may have to submit your bank statement to see if your budget allows bearing the additional burden of debt.
- Get a conditional offer from a lender. You can talk to your lender on the phone in case of any queries.
- Sign the agreement and get funds in your bank account.
You will be liable to make payments immediately after receiving the money in your bank account.
Summing up
Weekly loans are a good alternative to small loans, especially when you cannot pay off the full debt once and for all. These loans will make it easier to repay the debt and help you improve your credit report. However, you will still need to be careful about your repaying capacity.
These loans are expensive and can throw you in at the deep end. One missed payment will multiply the outstanding dues, and that can be problematic for you in the future. Borrow what you can afford. If you have savings, use them even if you are entirely sure about your repaying capacity.