Text Loans

Text loans are becoming an increasingly popular way of overcoming short term financial difficulties for thousands of people in the UK. There are now numerous lenders available online who are willing to loan small amounts of cash (£100-£500) over a fixed period of between 7 and 30 days.

All text loans will still require an initial online application completing and possibly certain documents faxing to the loan provider to verify some or all of the details. Once accepted, the client will then receive their money by bank transfer, directly into their nominated bank account.

At the same time they will also be issued with a unique PIN number which can be used in the future for the purpose of applying for additional loans. One simple text message quoting the PIN number and the amount required will then generate an almost instant payment into the client’s bank.

As with all financial transactions, honesty is the best policy; reputable loan providers want to be able to help on a short term basis, not lend money to clients who cannot pay it back. The initial application should be filled in accurately, honestly and without omissions.

The main aims of the application from the lender’s point of view is proving the client’s identity as well as confirming the existence of a bank account and proof of income. This is the reason, some lenders will also require certain documents faxing to them, to corroborate the information contained in the application.

Generally speaking, text loan lenders have certain requirements of their potential clients:

• Must be 18 years old or over

• Able to prove an income of at least £400 per month from employment or self-employment

• Have a UK bank account in their name capable of handling Direct Debit transactions

• Not have been made bankrupt or have County Court Judgments (CCJs)

Applicants who fall outside of these parameters are likely to be rejected by any reputable lender, but requirements do vary from lender to lender.

Some lenders have additional reasons for refusing clients, not lending to students for example, whilst others are slightly more accommodating and will even lend to unemployed clients provided that they are receiving sufficient income from benefits to afford repayment.

Text loans do tend to generate a very high APR (Annual Percentage Rate). This is because they are considered ‘high risk’ and are not intended as anything but a short term solution offered for a maximum of 30 days.

Although text loan providers are required by law to clearly state their APR, they will often show an example of the cost of borrowing from them as well e.g. a £100.00 loan, repayable after 7 days would incur an interest charge of £10.00.

Text loans should never be considered as a long term financial solution and careful thought should be given before taking one out. If the repayment is not made on the due date, the financial penalties are very high and future borrowing may be refused or restricted.