Instant loans are a convenient, useful form of short term credit for covering unexpected life events and financial emergencies. Yet the benefits of this type of credit are only enjoyed when they are used responsibly. As part of being a responsible borrower, it’s important to explore instant loans alternatives to ensure that your next financial step, is the right one.
Instant loans alternatives – Three key questions
Before learning about other forms of credit, you should first gain an understanding of your current financial situation. Begin this process with the following three key questions.
What is your level of income?
How much are your monthly outgoings?
What are you aiming to achieve with these funds?
With these questions answered, it’s time to gain an idea of how much an instant loan would cost you. Use our loan affordability calculator below to see what your monthly repayments may be, how much interest you’d pay and what the total cost would amount to.
*The calculator is for illustration purposes only and may not reflect the exact actual cost which depends on the lender.
When are payday loans useful?
Instant Loans Alternatives
When used correctly an overdraft can offer an immediate cash resource. However, research shows that the majority of consumers use up to their overdraft each and every month – a practice accompanied with charges that soon add up.
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Credit cards offer the ability to withdraw cash advances either by ATM or across the branch counter. However, cash advances are subject to far higher charges than typical on-card purchases.
What’s more, if you’re amongst the explosion of consumers who’ve taken out credit en masse, it’s likely that you’re considering an instant loan due to the high approval rates, even for those with a less than perfect credit history. In which case the majority of credit cards won’t be suitable – and even if they were, you’d still need to wait up to ten days for your card and pin to arrive.
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The Money Advice Service advise that UK households should have at least three month’s salary in reserve in case of an emergency. For those who follow this advice, and are prepared for a rainy day or an unexpected financial event, their emergency fund can serve as a free alternative to an instant loan. Yet a study by Nationwide reports that the average family has just £30 per week disposable income – income which must cover outgoings ranging from hobbies to luxuries. Safe to say that a rainy day fund is unattainable for the vast majority.
Line of credit loan
A line of credit is a type of flexible loan that revolves – allowing you to use it as you wish and repay it each month. You should think of this form of credit as an overdraft, with the interest charged as soon as you use the credit facility.
A guarantor loan features many similarities to a traditional loan, such as APR interest, monthly repayments and a set term. However, there’s one key difference – the need for another individual to guarantee the repayments should you be unable to meet your obligations. This form of credit brings with it serious considerations and is an agreement that you shouldn’t enter into lightly.
Find out your loan options with CashLady – Apply Now
Instant loans are ideal for cash emergencies
CashLady instant loans alternatives
CashLady partners may offer you an alternative to instant loans, such as a 1 – 6-month short term loan, a logbook loan, a line of credit or a guarantor loan. Here’s an overview of some of the options you may be offered.
1 – 6-month short term loan
|Lender||Loan Amount||Representative APR||Term|
|Satsuma||Min £100||1575%||Min 13 Weeks|
|Max: £1000||Max: 52 Weeks|
Vanquish Credit card
|Interest Free Period||Credit Limit|
|56 Days||Min: £150|
Representative Example: Given a credit limit of £500 and an interest rate on purchases of 39.94% p.a. variable, you will receive a 39.9% APR
|Loan Amount||Representative APR||Term|
|Min: £500||100%||Min: 12 Months|
|Max: £25000||Max: 4 Years|
CashLady is a Financial Conduct Authority Regulated Credit Broker. We work with responsible lending partners who adhere to the rigorous rules as set out by the FCA. Together, we are committed to treating you fairly. Specifically, this means that:
- You’ll never pay upfront charges or broker fees
- Your personal data will always be protected (we’re members of the ICO)
- Your information will never be passed onto third parties for marketing
- You’ll only ever be presented with offers from reputable, licensed instant loan lenders
Alternative Credit Brokers to Cash Lady – Comparing Interest Rates