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Loans in the UK can come in many different types and sizes. A loan of £1,000 would generally be considered to be a small loan, though towards the larger end of this small loans spectrum. It is around the upper limit of the amount which many creditors, which specialise in smaller loans, will offer to customers. With a larger amount it is likely that many lenders will provide it as an instalment loan. This is a type of loan where repayments are made in a number of instalments over a period of time, rather than the total cost of the loan being paid back in one go. With this kind of amount it is likely that these instalments will be made over a relatively short amount of time, such as a few months.
As taking out a loan can be daunting, with such a wide variety of different options to consider, SafetyNet Credit have put together some information to help those who are seeking a loan of around £1,000.
There are many situations in which you might have an urgent, emergency expense which you can only cover with a loan. A smaller amount such as a £300 or £500 loan may be useful for situations like repairing or replacing an essential appliance which has stopped working, such as a fridge or cooker. On the other hand, a larger amount like £1,000 can be useful for slightly larger emergency expenses. This might include things like vital repairs to your car or home.
Imagine, for instance, your car has broken down and can’t be used again until the problem is fixed and you have paid the bill from the mechanic. Not having access to your vehicle could make things like getting to work, getting the shopping in, or getting the kids to and from school all a nightmare. If you have no other options, taking out a loan to cover these costs so you can get your car back on the road sooner rather than later may be the best course of action.
Everyone’s financial situation is unique. As such you should really take the time to think about the different options available for those looking for a loan in the region of £1,000. There are a number of different things to think about, and you should always do proper research before deciding what type and size of loan to apply for.
One of the first questions to ask yourself is whether £1,000 is really the amount you need to borrow. Would you possibly be better off with a smaller amount like £100, £250 or £500? It is always best to only apply for and take out an amount which will cover those specific costs for which you are seeking credit. There is no point in taking out a loan with extra money beyond what you need for no real reason, and then having to pay this excess back with added interest. This would be to introduce unnecessary expense into your financial situation.
Another key thing to consider is whether you can afford the total amount of the loan. This total amount will be the original amount of credit, plus the interest accrued during the repayment period. You may think you can afford a loan of £1,000, but can you afford the interest payments on top of this? Taking out any loan is a serious financial commitment which should not be made lightly, but this is especially important to realise with a loan as large as £1,000. Therefore, if you do not think you can keep to agreed repayments with a lender, you should look into other available options.
SafetyNet Credit is different to other loan providers. We offer a service known as a revolving credit facility. This means that rather than a set loan amount which is then transferred to you when your loan application is approved, we instead provide a credit limit linked to your bank account. This remains available free of charge until you need it. If you need to use some of this credit right away you can transfer any amount you like up to and including your credit limit, and it should be transferred within 15 minutes. You will also be able to choose to switch on something called ‘auto-deposits’. This is an automated feature which allows you to set a point at which your bank balance will be topped up with an automatic transfer, to prevent it drifting into an unauthorised overdraft, helping you to avoid fees and charges.
For first-time customers the available credit limit begins at £100 and can reach up to £500, based both on what people require and what they can afford to repay. However, once a customer has used some credit and shown they are able to keep to the terms of repayment, they become a trusted customer and have the potential to extend their credit limit beyond this initial £500 cap. The credit limit for these trusted customers can be extended up to £1,000, still based of course on an assessment of affordability. If required, a customer with a credit limit of this size who is able to keep to repayments would be able to make a manual transfer of their whole available credit balance, which can therefore be used much like a traditional £1,000 loan.