Provident Short Term Budget Loans - Interest & Price Guide

Today we are looking at a relatively new service offered by Provident Personal Credit. We will be taking a look at Provident short term budget loans. We will check out the interest rates on these loans and see just who can apply for them. If you are considering borrowing money from a payday lender then it is worth comparing a few prices first and Provident may well be a good alternative to borrowing from a regular Payday lender.

Provident Personal Credit are one of the UK’s most popular doorstep lenders. They offer small loans over a relatively short period. They deliver the money to your door and then an agent will call on a regular basis to pick up payments. Most of the loans offered by Provident are over a period of 31 weeks or 52 weeks. But recently they have brought out short term budget loans, so let’s take a look at these.

Most companies who offer payday loans expect you to pay the money back in one lump some usually within a month. Provident however stretch the payments out on a weekly basis over a 14 week period. These short term loans are called budget loans. The interest is far less than you would pay on a standard loan from Provident. You have a choice of how much you can borrow and the initial limit for 14 weeks is set at £300. The company will take into account your circumstances before offering you a loan, so for instance if you are unemployed, you may only be able to get £100 as an initial loan.

The interest rates on these short term budget loans are not actually that expensive. Provident do have a reputation for charging high interest rates, but these new loans are far cheaper. Plus you have the added bonus that they are fixed rate, this means if you don’t pay the money back on time, you will not have to pay any additional interest. This is what makes these types of loan far less risky than borrowing from a payday lender. One thing that can put people off Provident is the APR. On a 14 week loan it is actually 1068% which may seem shocking. But the fact is that APR on this kind of loan is irrelevant, all that matters is how much interest you are charged. Often people don’t understand what APR means and this puts them off borrowing.

So how much exactly is the interest? Well if you were to borrow £100 over 14 weeks, the total payable would be £140. So you would be charged £40 interest for borrowing the money. This would work out at paying back £10 a week. If you wanted to borrow more money, let’s say £300 then the total payable would be £420, so you would be charged £120 interest on this. The weekly payments here would be £30 a week. This compares very well to a standard loan from Provident, for instance if you were to borrow £300 over 52 weeks, the total payable would then be £546. So you would be charged a whopping £246 interest. Below we have given a summary of the charges for 14 week budget loans.

So now you know the price and interest charges, who exactly can apply for these loans? Well to be honest unlike some companies, Provident are not that fussy about who they take on. You will have to provide them with a few details and they will run a check on your history. But as long as you or no one else in your household has any bad history with this company, then you should be accepted for a loan. Even if you are unemployed you should be given a small loan to start you off. If you make regular repayments then you should be offered further credit in the future.

If you do want a loan from Provident all you need to give them is a breakdown of your income and expenses and provide them with prove of ID and address. To apply for a loan you can visit the website or ring the local office. Once you have applied you should find that within a few days someone is round at your house talking you through all the details. Usually within a week of applying, as long as there are no problems, you should have the money in hand. A week later your first payment will be due.

The new 14 week loans are something quite new from Provident. They have most likely introduced them to rival the short terms loans by payday lender companies that seem to be springing up everywhere. The more classic loans offered by this company tend to run for a longer period. You can get 31 week loans or 52 weeks loans when you are a new customer. When you have built up a good payment record you can apply for longer ones over 81 or even 106 weeks. The interest you typically pay back on these is quite a bit higher. For instance if you borrow £500 over 52 weeks the total payable comes in at £910, so that over £400 of interest, so as you can see, not a cheap option.

They have also recently introduced the One Card. This is going to be widely advertised as an excellent way to show and borrow money. The cards come loaded with £200 on and you get an additional £10 as a bonus. Then you can spend your card at most major high street shops and also quite a few online places such as Amazin, iTunes and Play. There are also special offers at certain retailers so you might get 10% of at Argos or something like that. When you get one of these cards though the interest is about the same as a cash loan, but with the added extras they are probably better value.

So as you can see these new short term budget loans from Provident are actually pretty good value. If you just need a small loan over a short term then these are quite a good price. Plus with Provident you have the added reassurance that these are fixed rate loans so there are no nasty surprises if for some reason you can’t make the repayments on time. So if you are looking for a small loan over a short period of time, then why not consider taking one out with Provident Personal Credit.