You’ll find there are differences in repayment schedules, not only between the type of loans but in the companies that supply them. Each lender might do things differently, while the same applies to banks. Here we’ll give you an idea of how money lenders operate.
There are some things to remember. Paying back any money borrowed over a longer period will generally mean smaller repayments. However, you could be paying back more money because you’ll be charged interest over a longer period of time. Paying back early may not always reduce the total cost, although it could benefit your credit score to show you’re managing your debts. You would however need to check the T&Cs of your loan.
Repayment schedules for different types of loans
Payment plans vary a lot between companies and each type of loan. The following should give you a general idea of how each type of lending works.
The clue is in the name here, they’re designed to be paid back in one go, including interest. Generally, repayments can be between a month and a few days, with the payment date falling after you’ve been paid. Some companies will let you spread repayments out over two, three or a handful of instalments. Generally, you’ll have a month to repay your loan and associated costs.
Online Short-Term Loan
Plans for online short-term loans vary from 14 days to monthly repayment options. Some lenders offer repayment plans over a number of weeks, providing repayments are made every seven days.
This choice means even if a customer has very specific payment preferences, they’ll be able to find a loan for them.
Banks tend to provide larger loans which are repaid monthly over a longer term. They all tend to be long-term loans where it’ll take minimum of a year to give back, while some of them can go as high as seven years.
As Credit Unions are local companies, there’s no national standard for loan length and repayment terms. Generally, they’ll start at a few months and go up to a year or two, but they can be longer. You’d pay one instalment a month, of an amount suitable to you.
'Doorstep' or home collected loans
Most doorstep lenders have weekly terms ranging from 13 weeks to 52 weeks for new customers and may have longer terms with higher values for repeat customers. Each lender is different. For an easy way to compare the price of home collected and other cash loans available in your area at www.lenderscompared.org.uk.
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