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Text Loan Lenders

Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk

Gone are the days of standing in long lines, completing intricate forms and trying to impress bankers every time you need a bit of extra cash. A new kind of short-term loan has started taking off in the UK market; text loans. This type of personal finance company offers a short-term loan quickly and easily, all based on something as simple as a mobile phone. But how do you know which company to trust? These are three main points to consider before committing.

APR

APR stands for 'Annual Percentage Rate' and is used to describe what the real cost of your loan will be. It is a calculation which will include the interest rate (which will be high for a short-term loan), when it's charged (usually weekly or monthly for text loans), initial fees and any other costs.

Often this APR is demonstrated with an example to illustrate what a common loan and repayment may be. Do not consider a text loan if the APR is out of your financial reach by your next payday or you are already in debt as the interest charged on an unserviced loan will continue to rise and your payments will very quickly get out of hand.

LOAN TERM

Text loan lenders mostly specialise in short-term loans. These are usually offered on a weekly or monthly basis. This is why they are sometimes called "payday loans" since they tide you over to your next payday. Be warned that if you haven't paid your loan by your agreed term date your lender will likely keep adding the interest until you repay.

LOAN AMOUNT

This varies from lender to lender, but usually ranges between £100 and £1000. The important thing to remember when choosing a short term loan like this is the more you borrow the more interest you will have to pay back at the end of your loan term. It is important that you have a clear understanding of how much you will have to pay back when the time comes or you could be digging your short-term cash loan into a long-term problem, which will even decrease your credit rating if you can't pay it back.

Choosing your text loan lender is not difficult if you can compare the amount you need, what the eventual cost will be based on the APR and how long you need to repay it. Be thorough in your search as each company will offer different options and you need to find the best one for your situation.