Sometimes, no matter how hard we save or how careful we are with the money we earn, a big bill suddenly comes along when we’re least expecting it. And when it does happen, sometimes it’s difficult to see just how we’re going to get over this financial bump in the road without a bit of extra help.

We can go to family and friends to see if they have the spare cash to help us out and, in many cases, thankfully they do. But with the average UK citizen earning even less in wages than they were back in 2008, money is tight for everyone and that’s not always a possibility.

 In this article, BestUnsecuredLoans looks at:

• the types of financial crisis most people experience a few times in their lives
• the types of personal loan over 1m of us use every year to help ourselves
• what’s the difference in using a broker instead of going direct to a lender?
• how loan brokers are paid and what you need to check out to make sure you’re not paying out money when you don’t need to
• who the Financial Conduct Authority is and why it’s vitally important that you only work with a company with a licence from them
• how to apply for finance through leading loan broker, BestUnsecuredLoans.

What are the most common types of financial crisis people find themselves in?

 People get in touch with BestUnsecuredLoans for many different situations they need help with and five of the most common reasons are:

 Car breakdown or accident

 If your car breaks down and the family rely on it to get to work or to school, it’s a priority and it must be fixed. According to the Association of British Insurers, the average cost of a car repair is now £1,678 and it’s going to keep on going up (This Is Money).

 Suspension repair costs, often caused by Britain’s potholed roads, cost £297 (This Is Money) and, if you’re a diesel car owner, your vehicle is three times more likely to break down than a car with a petrol engine (The Sun).

 Unexpected large bill

 It’s happened to all of us and it’s always a shock. They’re now banning catch-up energy bills (average size £1,160, Ofgem) according to BBC News, but there’s still plenty of situations that can catch us out, like “My child spent £150 on Fortnite” (MSE) and this poor person’s unannounced £1,880 bill from their local water company (The Guardian).

Dental treatment

 Dental costs, both NHS and private, are racing ahead of inflation with:

• Band 2 treatments like a root filling costing up to £700 if carried out privately
• Band 3 treatments like putting on a crown costing £256.50 on the NHS (up to £1,100 if private)

 It’s impossible to live a normal life if your teeth are sore – it’s even harder on children. It’s another expense you have to meet either on the same day or within a couple of days.

 Funeral expenses

 It’s devastating when someone we love dies. Not only do we have to cope with the grief but there’s so much more to consider to, particularly funeral expenses.

 The average UK funeral costs £4,241 and if you live in Watford, it can cost £5,814 on average (The Guardian). Many family members want to chip in together to help but, with the rising cost of funerals, it’s something that’s harder and harder for an average UK family to budget for.

 Something breaks down at home

 Ever woken up on a cold Winter’s morning to find there’s no hot water and the radiators are freezing? Your boiler has gone and, according to uSwitch, one in five of us have suffered that over the last year with the average repair bill costing £245 (Moneywise).

 A washing machine drum costs £100 plus labour to repair as does a fridge freezer gas leak. If your tumble dryer’s control board breaks down, that can be £200 plus labour (Which).

What type of personal loans do people take out in financial emergencies?

 There are two types of personal loan which over 1m British people take out every year to help them through the types of financial emergencies we’ve just described: payday loans and short-term loans.

 Short-term loan

 A short-term loan is usually for an amount of between £100 and £2,500. Borrowers make either weekly or monthly repayments over the course of between 2 months and a year.

Payday loan

 A payday loan is usually for between £50 and £1,000 and you repay the entire amount plus interest back within 30 days. Most borrowers choose to make the repayment on the day their wages are transferred to their bank account.

 Instant loan

 Payday loans and short-term loans are often called “instant loans”, “quick loans”, or “cash loans” because they can be in your account within an hour of making your application. If something is an emergency, after all, you normally need the money straight away – getting it in a week or two’s time is no good.

 Financial Conduct Authority protections on short-term loans and payday loans

Borrowers taking out short-term loans and payday loans are advised strongly by government and by debt charities to make sure, if they can’t find the money from anywhere else, that the lender or Broker they choose to get their loan from is regulated and licensed by the Financial Conduct Authority.

 Please make sure you check any company out by searching for them on the Financial Services Register.

 Offering short-term loans or payday loans without a licence from the FCA is illegal. You may fall victim to a scam or you may have been approached by a loan shark. Just remember – “if it’s with the FCA, then it’s going to be OK”.

 Payday loans and short-term loans offered by FCA-licensed firms offer three important protections.

• For every £10 you borrow, you’ll pay no more than £2.40 back over a 30 day period (there is a legal cap on these types of loans of 0.8% every day)
• If you miss a repayment, you may be charged a default fee (many lenders actually waive this now). If you do have to pay a default fee, it can never be more than £15.
• When added together, all the interest and the fees you pay on a loan can never come to more than the amount of money your lender agreed to advance you in the first place. So, if you borrowed £600, you’ll never pay back, in total, more than £1,200.

What if I have a bad credit history?

 Payday loan and short-term loan companies are set up to work with people whose credit history is less than perfect.

 They’re more interested in whether your current financial situation means that you can afford to make all the repayments on time and in full. After all, today is today and today is what matters, not any difficulties you might have temporarily got into a few years ago.

 Don’t rule yourself out of applying for a payday loan or a short-term loan because you’ve had credit problems in the past. While we can’t guarantee you’ll be accepted, by choosing to use BestUnsecuredLoans to work on your behalf can give you a much better chance of getting a loan at the cheapest rate than by making dozens of applications yourself direct.

Should I apply direct to a lender or through a broker?

 There are two types of loan brokers for financial crises in the UK – payday loans brokers and short-term loan brokers. BestUnsecuredLoans is both a payday loan broker and a short-term loan broker.

 There’s nothing stopping you applying directly to lenders however it’s important to be aware that more than half of applications made direct to lenders are turned down. Why is that? Lenders have something they work to called “borrower profiles” – think of it as a description of their ideal type of customer. The closer you and your financial circumstances are to a lender’s borrower profile, the more likely you are to get a “yes”.

 That sounds simple enough but where it becomes complicated is that very few lenders show what makes up the borrower profiles on their internet sites. So anyone applying direct to a lender is applying blind – it’s no wonder that so many borrowers get turned down.

 Lenders like to work with brokers because brokers deliver them the type of borrower they want. How do they do that? It’s because lenders share, in great detail, their borrower profiles with their brokers. That means that, when you apply via a broker, the broker only introduces the type of borrowers to a lender they want to see.

 That works really well for these important reasons:

• Lenders don’t like it if a borrower makes lots of applications for a loan in a short space of time – each application shows up on your credit report. It makes a lender think, rightly or wrongly, that this person can’t handle their finances very well. Often that’s unfair because someone will make application after application because they’re being turned down because they don’t know they don’t match a lender’s particular borrower profile
• It saves a lot of time for borrowers – fill in one application form and a broker will then choose all the lenders they think will want to work with you.
• A broker does one credit search regardless of whether they’re introducing you to one lender or twenty. Because lenders trust the borrowers they work with, they don’t need to run their own searches.

 Do I have to pay a loan broker?

 We don’t think it’s right for borrowers to pay brokers to do their job. The job of a broker is to find the very best deal for you at the cheapest price. If anyone should pay a broker, it’s the lender who should pay.

 That’s how BestUnsecuredLoans work. Every time we match a lender with a borrower, the lender sends us a “thank you” payment when a borrower decides to take the loan out. If we present an offer to a borrower and they don’t proceed, that’s our tough luck and that’s how it should be.

 Not everyone believes what we at BestUnsecuredLoans believes though. Some brokers still, in this day and age, actually charge a borrower to arrange a payday loan or a short term loan regardless of whether they can find a lender to say “yes” and regardless of whether it’s a good deal for the borrower if they do find a company to say “yes”.

 Other companies charge an introduction fee (pay for every application whether successful or not) and that’s actually paid by the lender. We don’t think there’s anything wrong with this model but, because we’re motivated solely by finding the right deal for a borrower, we’d prefer to be paid on results instead.

 What to look for in a payday loan broker or short term loan broker

 If you’ve decided that, after asking family and friends and approaching other potential sources of money, you want to apply for a payday loan or a short term loan and you’ve also decided that you don’t want to spend hours making dozens of applications, a loan broker is the better choice for you, in most cases.

 Remember that a broker will be able to match you with lenders’ “borrower profiles” to make sure you’re only seen by the lenders who’d be interested in working with you.

 What are the six top things you should look for in a payday loan broker or a short term loan broker?

• You don’t pay them anything to do their job – brokers should only receive payment when you’ve accepted a loan and that payment should be made to them by your lender
• They have a lot of lenders they work with because the more lenders means better offers more affordable for you
• They don’t have a special tie with a particular lender meaning that, even if they can find a loan that’s better priced for you, they try to get you to sign up with their preferred lender (in other words, highest paying) instead
• They have invested in the latest technology meaning that they can deliver you the best quote in 60 seconds or less
• They have a licence from the Financial Conduct Authority and you can find them on the Financial Services Register
• They are based here in the UK with a UK call centre and customer services handling team

 Apply for a payday loan or short-term loanthrough BestUnsecuredLoans

 Start your search for a payday loan or a short-term loan to help you through your financial difficulties. All that we ask is that you only request the amount of money you actually need (no more) and that you are absolutely sure that you can make the repayment or repayments when they’re due.

 To get started, fill out our online application form. Within seconds, we’ll have the first offers back for you. We then send over your credit report to the lenders who want to work with you. Once they’ve processed your credit report, they come back with their final offers.

 Within 60 seconds, we’ll present you with the very cheapest loan on the best possible terms. Remember there’s no charge to our service and you’re under no obligation to accept the offer we come back to you with.

 To get started, please click here.