- Emma Parker
- February 26, 2021
It is a convenience that has made short-term loans popular, and text loans are on the top. Like cash loans, they are advertised as a quick funding source. Once your application is complete, the money will be transferred to your bank account within minutes.
Most of the borrowers think that text loans are alternatives to payday loans. However, mini text loans are not the same as payday loans. It is essential to note that pre-approval is a must before applying for text loans.
You cannot apply for these loans if you have not registered with the lender already. Well, whether these loans are convenient or not entirely depend on the individual circumstance and preference.
How mini text loans work?
When you apply for payday loans, lenders do not run a credit check and lend you money based on your affordability. The length of these loans is not more than two weeks. When you apply for text loans, lenders check your affordability as well as credit score. This is a big difference in both types of loans.
Further, text loans do not follow the same type of application process like payday loans. When you apply for text loans, a lender will send you a PIN that you will use to complete the application form. The PIN is used for security verification. Once you have provided all details through the online application form, you can sign up for text loans.
Next time, you will have just to send the text, and the lender will lend you money. This is because all your details will be saved with the lender. As you put in the request, the lender will immediately refer to the details you sent through the form to make the decision. However, there are a lot of things you need to be careful about.
Lack of repayment flexibility
Although text loans are considered convenient like other small cash loans, they do not offer repayment flexibility. One of the greatest drawbacks is you are asked for limited information.
You do not have access to online loan calculators that could allow you to fine-tune your repayment terms.
Further, the term of these loans is usually not more than two weeks. Because of all these terms and conditions, these loans are not that flexible.
Brokers can send spam messages
When you are applying for a text loan, it is essential that you choose an authorised lender. A rule of thumb says that you should research online to ensure that the lender is authorised and genuine.
Some brokers will be interested in getting your phone numbers to send spam messages. Beware of such brokers.
Try to apply for text loans directly with a lender because if you apply for these loans with a broker, you will receive promotional messages and loan offers from various lenders.
Personal details change
As you know, pre-approval is crucial for text loans. The lender will need your personal details, including income and expenditure details. They will refer to this financial information to make the decision. A slight change in your personal information will not let you have the loan signed off on.
For example, if your contact number has changed and is not linked to your account, the lender will not recognise your phone number when you send the text, and as a result, your request will be declined.
Likewise, if your financial information changes, make sure that you update them. However, sometimes people do not bother to update the fluctuation in income and outgoings. Note that the lender will make the decision based on the data already stored with them.
If there is any change in your financial situation and you do not update, you may end up borrowing more than your affordability.
Mini text loans can be convenient once you have filled in all details at the time of applying for these loans online. Once you have done it, all you need to do is send the text to the lender and get money directly in your bank account.
However, it is always suggested that you update all details otherwise, the lender will not be able to identify your account and turn down your application. You can make all updates by resetting the application form.