Short term loans UK are types of unsecured finance usually payable back from 2 to 12 months. They are designed to help people out when an unexpected bill or expense arrives.
Unlike a payday loan, where you pay back the amount you borrowed and the interest all in one go, a short term loan allows you to spread repayments back over a longer time. That means that the amount you pay every month is less and, for many, more manageable.
How do short term loans work?
If you need between £80 and £2,000, short term loans are there to help.
Simply let a short term loan company or FCA authorised broker (like CashLady) know how much you want to borrow and over how long.
Once you’ve decided that, you need to give some details about yourself over to the short term loan provider to help them make their decision about whether they want to lend to you or not.
Short term loans quick approval
Those details include:
• Your age (you must be 18 or over)
• That you are a UK resident
• Your bank account and debit card details
• Where you work, how much you earn, and when you get paid
• Where you live, how long you’ve lived there, and whether you’re a homeowner or a tenant
For most lenders, this is all the information they need to make a decision. And they make their decisions quickly.
If they say “yes” or “no”, you’ll get your decision almost instantly.
Sometimes they need more information. If that’s the case after your application, make sure you’re available to speak to so that you can provide them with the extra details they need. As soon as they have this, you’ll find out quickly whether you’ve been accepted or not.
Short term loans – receiving your cash
When you’ve been accepted, you’ll find out how much they’ve agreed to lend you and over what time scale.
Their quote will show you how much your monthly repayments are and how much you’re paying for the loan in total.
If you’re happy with that, they’ll ask you to sign online and agree to their terms and conditions. Once they’ve got your approval, they normally wire the money directly into your bank account within the hour.
Short term loans, sometimes called emergency loans, are designed for situations where there’s an unexpected financial obligation that you can’t meet straight away. Lenders know you’re in a hurry to receive the cash so they work really hard to get it to you in minutes.
Short term loan interest rates
The FCA passed laws in 2016 which set a maximum cap on how much interest you can be charged on a high cost, short term loan.
For every £100 you borrow, the maximum amount of interest you pay on that in a single month is £24. Some short term credit providers charge that full amount and others charge less.
In addition, you will never be asked to pay more in interest and charges than the original amount of the loan you took out. So, if you borrowed £300, you will never pay more than £300 in interest and charges on top of that amount.
Short term loans online
Applying for short term credit online is easy. It takes no more than a few minutes to give over the information you need to be considered.
Short term loans for bad credit
Everyone in Britain has a credit score. That score is given to them by one of the three credit reference agencies – Experian, Equifax, and Callcredit.
Every time you pay the electricity company, your credit card balance, your loan repayments, your mortgage repayment, pretty much every bill – the credit reference agencies put a note on your file saying that you made the payment on time and for the right amount.
The opposite is true as well. When you miss a payment, the credit reference agencies are told.
Using all that information, they then come up with a credit score. The higher the number, the better credit rating you have. The lower the number, the worse credit rating you have.
Banks, building societies, and many lenders that are household names target themselves towards people with high credit scores.
Short term lenders like people with high credit scores too but they’re a lot more open-minded than banks and building societies. They will sometimes offer short term loans even for bad credit.
They’re happy to look at a person as they are now, how much money they need, and how likely it is that you’ll be able to pay it back.
Just because they’re more open-minded doesn’t mean they’ll automatically say “yes”. But it does mean that they’re more likely to say “yes” than banks and building societies.
Is a short term loan right for me?
Short term credit is only right for you if…
• you don’t have the money now to meet a bill that needs immediate payment and
• you are absolutely confident that you can afford to make the repayments to your short term loan provider in full and on the dates agreed.
You should only use short term credit for emergencies. Please do not get into the habit of applying for a loan after loan to tide over your normal finances. If you are, please seek help and advice.
Short term loans in the UK
If you need cash in a hurry and want to find out the options available to you through short term credit, click here to fill in our short term loan application page.