Taking into account credit cards, store card debt, and bank and building society loans, levels of debt in the UK are growing. Even the most sensible savers often find themselves owing large amounts of money in student loans, which an increasing number of young people take out in an effort to increase their chances of successfully getting into the job market. It’s no wonder that so many people choose to take out short term personal loans to cover their urgent costs. These borrowers get a cash advance that can tide them over for a few days, weeks or months.

Some decide it best to take out a traditional “secured” loan, backed up by collateral in the form of a house or other high-value property. However, an increasing proportion of borrowers are opting for the unsecured loans available on most high streets.

If you go for an unsecured loan, you should make your decision with a very clear idea of what you want. Loans are available in many different amounts, and the repayment term is almost always proportionate to the amount borrowed – i.e., the bigger the loan, the longer the consumer has to pay it back. Most unsecured loan providers will want sums of a few hundred pounds paid back within days of paying them out, while loans of over £10, 000 may have repayment terms of up to ten years.

Remember, though, that most short-term loans recompense the lender for the lack of ‘secure’ collateral with high interest levels – and like all other kinds of loans with interest, the longer the amount is left unpaid, the larger the sum of interest will be. So it’s always best to pay off large debts as soon as you are able to. A clear repayment structure should be drawn up when you take out the loan; this involves agreeing on the amount to be paid back at each period, and the period of time over which the loan must be paid back. If possible, you should check with your lender to ensure that your repayment structure is flexible, and that you are allowed to pay off large lump sums as part of the repayment.

Whether you’re borrowing with secured or unsecured loans, remember that all borrowing – from credit card payments to student loans – should be managed responsibly. To be sure that the cash advance now is something you’ll still be thankful for later, make sure that you know how and when you intend to repay.

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