There are thousands of different types of loans available today, from car loans, business loans, and student loans to mortgage loans and personal loans. In this blog post, we’ll be exploring one very specific type of loan: provident loans. Maybe you think there isn’t much to learn about these kinds of loans, given how relatively simple they are; after all, they only have one primary function -– lending people money when they need it most.
Whether you have heard of provident loan services before or not, if you’re considering taking one out soon, this blog post will hopefully give you some insight into what they are, how they work, and whether or not they are a good idea in your particular situation.
What is a Provident Loan?
Provident loans are the type of unsecured loan that gives you access to funds that meet your needs. They allow people with poor or bad credit to get easy and prompt access to the money they need to deal with an emergency. They are not the same thing as a payday loan, which is another type of unsecured loan that is often used by people with poor or bad credit.
If you need some quick cash, a provident loan could be the answer. Provident loans are small loans that can be used to cover any number of expenses. They are usually from $1,000 to $25,000 and given for relatively short periods ranging from 1-12 months with interest rates that vary widely depending on the borrower’s credit rating.
They are designed to be short-term loans that you only use when you don’t have access to any other source of funds. Because of that, they tend to have high-interest rates and come with fees and penalties for late payments.
The way provident loans work is pretty simple: you go online, fill out an application form, and if your application gets approved, money will be deposited into your bank account within just a few hours.
Why Would I Need a Provident Loan?
Some common reasons include:
- Unexpected medical expenses
- Money for Christmas presents or family vacations
- A new car or home
Provident loans can be a great option in these situations and more. They can be a good solution if you are looking for a short-term loan with reasonable interest rates that don’t exceed the typical APR.
That said, if you’re not in dire need of money and just want to borrow it for fun, then provident loans might not be your best option. If you want this loan, make sure that this is really what you want and that there aren’t any detrimental consequences before signing on the dotted line!
How do Provident Loans Work?
There are two types of provident loans:
- secured and unsecured.
Secured loans require the borrower to pledge collateral to secure their repayment, while unsecured loans do not require any collateral at all.
Provident Loans Vs. Personal Loans: A personal loan works just like a car loan or home mortgage. If you don’t pay it back on time, the lender will take your property/car/home to recoup what they lost in interest and fees (but they can’t take away anything else).
A personal loan is one of the least expensive ways to borrow money but is only available through a bank or credit union. A provident loan works differently because there is no tangible collateral that needs to be handed over for repayment purposes.
With a provident loan, the lender takes on the risk of nonpayment and therefore charges higher interest rates than other types of loans (approximately 20% APR). The downside is that if you have less than perfect credit, getting this type of loan might be difficult since lenders will want some assurance that they will get their money back.
The Advantages of a Provident Loan
- They can be a lifesaver: The vast majority of people who take out loans have no intention of not paying them back. But, there are certain circumstances in which even the most responsible borrower might need a little help making their loan payments. Whether it’s an injury or illness that prevents you from working, or your car breaking down and preventing you from making it to work on time, sometimes life just gets in the way of your finances. Provident loans offer an easy way to stay afloat when these types of situations happen, and they allow you to take out a small sum of money for a short period without worrying about the repercussions associated with taking out another type of loan.
- You can use them for anything: Provident loans are available for any purpose. You don’t have to make sure that what you want the loan for falls under one particular category. This gives borrowers a lot more freedom when it comes to using the funds they get from their provident loan.
- They offer low-interest rates depending on certain factors: You might be wondering what one has to do with the other. After all, if you’re only taking out a small amount, how much difference could the interest rate make? The truth is that different types of loans have different interest rates and terms attached to them; while this doesn’t necessarily matter if you only take out one or two loans over your lifetime, it becomes more important if you find yourself in a situation where you have to take out more than one loan. This is because you’re more likely to pay more in interest if you take out a loan with a higher interest rate, and this can end up making the loan much more expensive than it needs to be.
- They are available for bad credit: If your credit rating is not all that great, then there’s no need to worry. Provident loans are available for people with bad credit as well. However, if you have a poor credit rating, then you will usually find yourself paying a higher rate of interest when compared to people who have good or excellent credit scores.
- They offer flexible repayment plans: Provident loans also offer borrowers the ability to choose how they repay their loans. They can either repay their loans in full on or before their due date, or they can choose to repay them over an extended period. This gives borrowers flexibility when it comes to repaying their loans and helps them stay out of debt for longer periods.
The Disadvantages of a Provident Loan
- The main downside to a provident loan is that you lose out on the extra interest you would earn if you took out a traditional loan. Nevertheless, even with this disadvantage in mind, it’s still a better option to take out this type of loan for emergencies than to put it off and risk not having much money when the time comes. If you need money For an unexpected expense or want to invest in something without the risk of spending your hard-earned money (or worse, going into debt), then taking out a provident loan is a smart idea.
Should You Get a Provident Loan?
- Ask yourself, are you in the correct situation to take out a loan in the first place. By all accounts, provident loans are designed for emergencies, meaning that they should only be taken out when there is absolutely no other way to get by until your next payday. If this sounds like you, then a provident loan could be an option. If not, then it will probably be best to explore other solutions.
- The bottom line is that you should find out as much as possible before getting a loan. The more you know, the better idea you’ll have about your best course of action. Provident loans might be right for you if you need money in a hurry, but they are not right for everyone. But unfortunately, as of now, as we are writing this blog post, the provident bank no longer exists. They have run out of Service. According to mylenderloans.com, they said that doorstep loan is an alternative to a provident loan.