When it ever comes to anyone looking to borrow money, people may or may not know that there are usually a number of different borrowing options available for people to choose from, apply for and then potentially take out. That is just one of the many different reasons why no one should ever rush into apply for finance or just take out the first piece that may come along their way. From the financial market place these days’ people can often look to obtain both short term loans and instalment loans when a loan is the finance needed. This way people can then look to borrow a selection of different loan amounts for repayments then due back over a number of different repayment terms. Both of these are very common borrowing in a loan like format. Credit cards are also available from direct lenders. These of course allow people the chance to pay for a range of different items or also withdraw cash on credit via the actual use then of the card itself. All of these are provided by direct lenders and are a common way of borrowing money. They will each however have both benefits as well as negatives regarding what they offer people.
The short term loans borrowing market has certainly grown in recent years as a high number of different people it seems are turning to this way of borrowing money when they need finance. These loans as the name would suggest are out there to help people obtain a small amount of money for a short space of time. A pay day loan is the most common type of short term loan available in the market place. A short term loan when obtained will be due to be repaid within a twelve month period of time otherwise it will not then be a short term loan. A pay day loan certainly falls into this category because when these are obtained, they are repaid back to the lender as soon as that borrower is paid again from work.
Direct lenders as mentioned above can also provide instalment loans as the borrowing alternative rather than the short term loans available. This way they can potentially borrow more money when needed and then they can repay that debt over a longer period of time in possibly smaller instalments. A mortgage for example is a common type of instalment loan borrowing. These are a very common type of instalment loan and these are often repaid over many years. If a loan is due to be repaid back to a lender over longer than twelve months then the loan must be an instalment loan and not a short term loan. An instalment loan will be commonly used for long term financial purposes such as a new car or indeed a new house. A short term loan will not be used for long term purposes and should only be used encase of financial emergency such as paying an unexpected bill etc.