Short Term Loans
How Much Do You Need?
- Same-day funding
- Loans available up to £5,000
- No late, hidden fees
- Bad credits considered
Representative example: Borrowing: £1,200 Interest: 0.34% per day for up to 75 days (124% per annum, variable) Representative: 49.7% APR (variable).
What Are
Short Term Loans?
Short term loans are effectively a form of unsecured credit that usually needs to be repaid over a short period of time that will usually be within just a few months up to a year. And while short term loans UK tend to be offered at higher interest rates, they are a popular choice for many borrowers because most short term loan lenders require little to no collateral like your car, home, or any other property, when it comes to making a lending decision. Moreover, they are much easier and faster to access, as compared to traditional bank loans, since your application can be quickly processed online and granted, all within the same day, if not within hours.
This means there’s no need for you to deal with excessive forms, queuing at the bank, or having to deal with long loan processing times. Plus, the benefit of a short term loan is that depending on the credit lender and how much you borrow, you can even set the repayment date that best suits you. This in turn makes bad credit short term loans an ideal solution whenever you need a quick cash influx to deal with urgent and unexpected expenses, such as sudden car repairs, medical expenses, etc.
Advantages and Disadvantages of Short Term Loans
Advantages
The biggest benefit of short term loans is that a short term loan UK direct lender will not place a huge emphasis on your credit history, in order to grant approval. What is more important is showing them proof of employment and a steady income, as well as proving that there aren’t any outstanding loans. This in turn highly benefits those with a limited credit history or bad credit, who are in urgent need of quick short term cash.
Another advantage is that short terms loans tend to offer borrowers a great amount of flexibility, as you can easily make a schedule with the short term loans direct lender that best suits your capabilities. This makes them a good choice, especially if cash flow is currently tight, but you anticipate that things will financially improve soon. Moreover, while short term loans UK usually come with higher interest rates than traditional loans, they do benefit from a shorter period of time to accrue interest. This means that as long as the short loan is paid back within about a year, you can better manage your debt since there isn’t as much time for the interest to build up.
Disadvantages
On the other hand, while short term loans UK online are easy to acquire, the problem is that they also come with higher interest rates, which can make the repayment figure heavier than with traditional loans.
Moreover, while you don’t need to have a stellar credit score to be approved for a short term loan, any failed attempt to make repayments can still bring down your credit score even further.
Furthermore, if you want to repay the short loan before the end of the term, there may be an early repayment penalty, especially if the interest rate is fixed, because it means the amount of interest charged by the lender will not be earned as profit.
What’s the Difference Between Short Term and Payday Loans?
Despite the fact that short term loans and payday loans have a number of close similarities, there is still a slight distinction between the two. Payday loans are essentially meant to tide borrowers over until they receive their salaries on ‘payday’ hence the term. They are usually designed to be repaid in one lump sum, and in most cases, any short term loan direct lender will often utilise a continuous payment authority to automatically take the money owed out of your account, as soon as you receive your salary at the end of the month.
And with the typical high amounts of interest that usually come on top, they can sometimes be tricky to repay and failure to do so can often result in penalties that end up bumping up your debt even more. By contrast, short term loans UK tend to come spread over a fixed time period of several months, which can often make the loan repayments more affordable and manageable. It is also for this reason that lenders are usually more open to charging less interest in comparison, making them the best short term loans for those in need of a quick cash injection.
Am I Eligible to Apply for a Short Term Loan?
The benefit of applying for short term loans is that even if you have a bad credit score, you can still qualify for one. Moreover, most short term loan UK lenders will want to make the process fast and easy for borrowers, as well as make these short term loans available to as many people as possible, so that they can access the highest returns on investment. As a result, the criteria that a short term loan direct lender will use to review your application will usually be pretty standard, as all you need to do is make sure that you are:
- 18 years of age or older
- A UK resident
- Have an active bank account and debit card
- Have a regular income
- Not bankrupt or have a recent CCJ
If you happen to fulfil all of these requirements, then you can confidently apply for a short term loan that works for you without much hassle or further risk to your credit score.
How to Find the Right Short Term Loan?
Finding the right credit lender for a short term loan can often prove to be a tricky process, purely because there are so many credit lenders to choose from online. And as a result, finding the one best suited to your financial situation can sometimes take a bit of time and effort. Moreover, if you aren’t careful, you may even find yourself applying for a payday loan, instead of a short term loan, which is similar to some extent but also very different.
For instance, while they can both be approved quickly and without the need for collateral, short term loans can be paid steadily in instalments over a monthly period, whilst payday loans must be paid at once and in a lump sum. They also come with higher rates of interest, as well as fees, making them a more expensive form of borrowing. However, you can easily make sure that you don’t make this mistake, as well as speed up the search process by utilising our online broker service, which will help you to compare and narrow down the list to the best short term loans available in the UK.
Find Your Right Short-Term Loan Now!
PaydayLoansUK provides various loan options with terms ranging from 3 to 12 months and amounts from £100 to £5000. We make sure there's always the right loan to fit your financing needs, so you can repay it comfortably.
Short Term Borrowing Alternatives
If taking out a short term loan is either too risky or not affordable, then there are a few alternative options that you can take into consideration instead.
Overdraft
If you have a current account, taking out an overdraft is a very practical option to take advantage of. And while you will usually need to pay out a small fee to use it, this will usually end up being cheaper when compared to taking out a short term loan, with some current accounts even offering a 0% overdraft on small cash amounts.
Credit card
If you happen to have a good credit rating, then you can always opt for a 0% purchase card, which if used correctly can function as an interest-free and flexible loan. However, you will need to at least pay back the minimum amount every month and repay the full amount before the 0% term is over.
Guarantor loan
If you would like to borrow money over an extended period, then you can always consider applying for a guarantor loan. This involves getting a co-signer, like a close friend or family member to agree to let you borrow against their good credit rating by taking responsibility for your debt, should you fail to make repayments.
FAQs
Can I get a short-term loan with bad credit?
While most financial institutions like banks will usually require you to have a good credit score in order to consider you for a loan, the benefit of short term loans UK, is that lenders are more than willing to consider applications, even if you have a bad credit history. Instead, a short term loan direct lender will usually opt to assess your ability to pay back the loan, which means placing more attention on your state of employment and current income stream.
What criteria do I need to meet to be approved for a loan?
When it comes to successfully applying for short loans, you will need to prove that you are a UK resident over the age of 18, are actively employed, have a steady salary, and also have a legitimate debit card and bank account. As long as you fulfil these basic requirements, you should be able to be granted a short term loan by any lender without any problems.
How long are short-term loans for?
There are different types of short terms loans available to choose from, such as payday loans and instalment loans. And as such, some of them will usually need to be repaid within 6 to 18 months, while others can be due within a matter of weeks. Ultimately, the length of time on your short term loan will largely depend on what type of loan you apply for, as well as the terms that you agree to with the short term loan direct lender.
Which loan is best for the short term?
In most cases, instalment loans are the best short terms loans to apply for, because, unlike short term payday loans that require you to repay your loan in one lump sum, instalment loans tend to be more flexible, as they allow you to pay back your debt over the course of a set period of time. This makes them the preferred choice for those borrowers that may want to make their payments either monthly, weekly, bi-weekly, or on a different schedule that is best suited to them.
Are short-term loans more expensive?
Short term loans usually come with higher interest rates, as compared to traditional loans. However, you should also take into consideration the fact that since these loans are borrowed over a shorter period of time, you will often end up repaying them back faster. As such, traditional loans can sometimes be more expensive over the long term than short loans UK, despite them having lower interest rates.
Will a short-term loan affect my credit score?
A short term loan can both positively and negatively affect your credit score. If you apply for a short term loan and manage to pay it back on time, then this can help you to raise your credit score. However, if you are granted a short term loan and fail to pay it back on time, then this can end up lowering your credit rating even further.
Get a Short Term Loan Today Without Hassle!
If you urgently need to secure a quick and easy loan, then what you need is to find yourself a short term loan direct lender that will grant you one within the same day, without you having to put up any collateral. Luckily for you, PaydayLoansUK is in a great position to help you find the best short term loan today!
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