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Short Term Loans
What are Short Term Loans?
Short term loans are forms of credit you can borrow for shorter periods of time, typically between 3 months and 12 months.
Unlike traditional longer term finance from banks, you won’t be paying this type of borrowing for years at a time. However, the APR for short term lending is often higher.
If your credit history is less than perfect, you may have a greater chance of being accepted. This is largely due to higher interest rates of short term credit, which allow lenders to have a more relaxed approach.
This does not, of course, mean that lenders can ignore responsible lending rules. So anything you apply for will be subject to affordability checks.
Short Term Loans in the UK
Short term loans in the UK have risen in popularity in recent years, thanks to the financial crisis of 2008 and the current rising costs of living. The concept of lending between one person and another goes back centuries to the practice of transferring money, called Hawala in Arab Countries and South Asia.
Today, the short term lending market in the UK exists with strict regulations to protect you as the customer and to ensure good lending practices.
How much can I Borrow?
How much money you can borrow with a short term instalment loan, depends on your personal circumstances. Usually, you can borrow between £100 and £5,000.
Short Term Loans for Bad Credit
If your credit rating suffers from being lower than you would like it to be, you might still be able to get short term finance for bad credit. However, short term bad credit loan offerings, don’t necessarily mean that your application will be approved. Lenders want to know that you can repay the total amount you borrow in full and on the dates you agree to.
The majority of responsible lenders will look at you as the individual you are now, not who you were several years ago. So while acceptance isn’t a guarantee, they are more openminded than traditional lenders.
How to apply Online
Applying for a short term loan online is relatively easy compared to traditional methods. The majority of lenders have an online application process.
You will be asked to provide some necessary pieces of information such as:
Your full name
And any further financial details, which can vary between lenders.
In the event that you would rather talk to someone before making your application, you can search for the lender’s website to find their customer service details and telephone number.
Advantages of Short Term Payday Loans
Some of the benefits of short term payday loans include:
Fast approval for applications
Borrowing over a shorter period can mean paying less interest
Can help to improve your credit rating (if repayments are made on time and in full)
Flexibility to borrow what you need when you need it
FCA protection with price caps in place
Disadvantages of Short Term Loans
There are of course some downsides to short term borrowing which include:
Interest rates can be high
Can have a negative impact on your credit score if you fail to pay on time