Short Term Loans

There are many different types of short-term loans available in today’s financial market. These loans get their name from the small duration of the loan, after which they have to be repaid. This is also the most distinguishing feature of these loans that sets them apart from bank loans. Bank loans are usually provided with more detailed applications and their payments plans extend over months and years of due payments, as compared to the quick repayment of a short-term loan. Some enterprises also offer an alternative money borrowing solution known as text loans. However, the easiest method to get a loan is to apply online for a short-term loan as compared to visiting a bank or money lending company. Most short-term loans offer a principal amount of £1500 or less. They are generally repaid, after you have received your next pay check. The purpose behind short-term loans is to help you out in tight spots in life, when you are in urgent need of a small sum of money.

Finding the Right U.K. Based Short-Term Loan

There are many occasions where you need immediate finances to tackle emergencies, and this is when you need to opt for a short-term loan. However, when taking a loan, you should carefully consider your moneylender, as the wrong selection on your part will fail to provide you with the financial security that you need.

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Video Transcript

Over the years, payday loans have earned themselves a bad reputation in the financial sector, as they are considered to be an expensive way of borrowing money. Mainly, the high cost of the loan is attributed largely to its APR, which is comparatively higher as compared to many long-term loans.However, a comparison of the APR of a long-term loan with a short-term one is not justified. In fact, no short-term loan or short-term financial solution can be accurately measured with the help of its APR. The reason for this is that APR is actually a way of measuring the annual rate of interest incurred upon a loan. Thus, if your loan is of just 30 days or 3 months, the loan is not extending over the entire period of one year. Hence, when you measure its APR, it automatically becomes higher than it would be for a long-term loan. This shows that no matter what the duration of your short-term loan may be, its calculated APR will always be higher than that of a loan that extends over a year.

How to Measure the Cost of Payday Loans

If you want a more accurate means of measuring the true cost of a payday loan, calculate the amount of interest that is charged on the loan per day (which is often approximately 1%). Alternatively, you can also calculate the interest charged for every £100 that is borrowed within the loan (generally from £25 to £35). Using these alternative means of calculating the interest charged on a payday loan will provide you with a much more accurate measure as compared to the APR, as a loan that is not extended over a period of one year will automatically provide you with higher APR calculations.

Short Term Loans Lender - Comparison Table

The comparison table below highlights some of the top UK short term loans companies. You can quickly spot those one out that would suit your needs and help you with the cash flow that you so desperately need.

The short-term loans tables contain those top short term loans lenders that have a high acceptance rate and even with a bad credit history would be willing help you out.

Lender
Representative APR
Min Loan Amount
Max Loan Amount
Terms
Example
993%
£ 200
£ 1,000
Up to 12 Months
Borrow Amount: £ 200
Time: 3 Months
Interest Accrued: £ 92
Total Repay: £ 292.00
Monthly Repayments: 3 x £ 97.06
1058%
£ 50
£ 500
Up to 5 Months
Borrow Amount: £ 500
Time: 5 Months
Interest Accrued: £ 536.82
Total Repay: £ 1036.82
Monthly Repayments: 5 x £ 207.36
2692.8%
£ 50
£ 400
Up to 4 Months
Borrow Amount: £ 150
Time: 4 Months
Interest Accrued: £ 184.52
Total Repay: £ 334.52
Monthly Repayments: 4 x £ 83.63
1971%
£ 50
£ 500
Up to 5 Months
Borrow Amount: £ 500
Time: 5 Months
Interest Accrued: £ 469.10
Total Repay: £ 969.10
Monthly Repayments: 5 x £ 193.82
2814.2%
£ 50
£ 750
Up to 18 Months
Borrow Amount: £ 150
Time: 28 Months
Interest Accrued: £ 633.06
Total Repay: £ 783.06
Monthly Repayments: 18 x £ 43.51
278%
£ 200
£ 2,000
Up to 12 Months
Borrow Amount: £ 1000
Time: 10 Months
Interest Accrued: £ 855.20
Total Repay: £ 1,855.20
Monthly Repayments: 5 x £ 185.52
999.6%
£ 100
£ 750
Up to 6 Months
Borrow Amount: £ 450
Time: 6 Months
Interest Accrued: £ 405.00
Total Repay: £ 855
Monthly Repayments: 6 x £ 142.50
746%
£ 150
£ 1,000
Up to 6 Months
Borrow Amount: £ 580
Time: 4 Months
Interest Accrued: £ 266.72
Total Repay: £ 846.72
Monthly Repayments: 5 x £ 211.68

Rate and Terms

Short Term Loans Explained

Short-term loans are a means of borrowing various amounts of money for a small duration of time, usually a couple of weeks or a few months. Most people opt for these loans because they offer a flexible payment solution. Some moneylenders offer a 14 to 30 days repayment time for short-term loans, while others may provide nearly 3 months for the repayment of the loan. The money is then deducted from your account at the end of the time duration of the loan. The aim is to provide people with an easy means of borrowing money when needed, while avoiding financial stress. On the other hand, long-term loans are those that are taken for large sums of money for longer time durations, usually 5, 10 or 20 years. The repayments of these loans are made each month or year. Long-term loans include all types of personal loans, car loans and home mortgages, etc.

Emergencies and Short-Term Loans

Emergencies are sudden occurrences that are unpredictable and require immediate resolution. However, for emergencies like urgent home repairs and accidents, immediate funding is required in order to make the repairs and pay the medical bills. The best option when you are in need of money for emergencies is to contact family members, as they are reliable sources of borrowing money. However, in their absence, the next best solution is to opt for close friends who may be able to help you in your financial distress. Alternatively, some people also save money for a rainy day, just in case of such emergencies, and can use this amount in times of urgent need. Experts suggest that every individual should keep at least £1000 in their ‘rainy day’ account for emergencies. Unfortunately, most of us are unable to save efficiently for an unexpected day in the future when we may require urgent cash at our disposal. We simply cannot see ourselves in dire situations and hence, we do not plan our money and savings accordingly It is in such situations that people are then in need of short-term financial solutions that allow them to tackle the emergency and repay the loan at their next payday. In today’s technological age, time is of the essence. People want quick cash in a matter of minutes with easy to apply procedures. This is especially true when they are in urgent need of money. Thus, short-term loan solutions offer them the opportunity to manage their financial needs immediately with same day money transfers. For this, you can choose to go to your bank and file for a short-term finance loan, but bank loan procedures are time consuming, and emergencies require immediate funding. If you are in an emergency, you will not have the time and patience to drive to the local  bank and fill the long and complicated forms to apply for the loan. Even after the application form have been filled, most banks are crowded and you will have to wait in line for your turn while your urgent needs take a backseat for the time being. This is not how you will want to manage your urgent needs. Thus,  although bank loans are a good option, they cannot be chosen in times of emergencies. Hence, as people require urgent and immediate cash for emergencies, more and more people are opting for online short-term loan solutions. These loan solutions are offered by many moneylenders in retail stores as well as on online money lending websites. However, online loan applications give you the added convenience of applying for your loan, no matter where you may be present. Additionally, online loan applications are easy to fill, and  can provide you with a quick and same-day cash transfer; allowing you to manage your emergencies with ease. The best part about online short-term loans is that you can apply for them from a variety of screens. This means that you can obtain your loan via laptops, smartphones, or any other mobile devices that are in your possession.

Kinds of Short-Term Loans

  • Online Short-Term Loans – In these short-term loans, the entire application and correspondence process between the moneylender and the borrower takes place online. The funds are then transferred electronically to the customer’s bank account. Thus, you only need access to the Internet to apply for these loans from your laptop, tablet, smartphone, or desktop computer.
  • UK Based Short-Term Loans – Within the UK, the eligibility criteria for short-term loans is simple and easy to fulfil. The terms include that a person must be living there legally, must be employed, and should be present within the UK for the entire loan duration. These loans are provided in pound sterling to residents of UK, Scotland, Ireland, and Wales.
  • Cheap Short-Term Loans – The true cost of a loan includes not only the amount that has been borrowed but also, the amount of interest that is to be paid on it. A cheap short-term loan is a loan that is provided to customers at a less than normal APR. This means that the loan has a lower interest rate, which makes its overall cost cheaper as compared to its competitors. Thus, some money lending websites can actually provide you with a short-term loan that is one of the cheapest loans available online with an APR of just 993%.
  • Instant Short-Term Loans – When you apply for a short-term loan, most moneylenders will immediately transfer the funds to your account to cater to your urgent monetary needs. However, some of them prefer to verify your details via phone before transferring the money, but the transaction is usually processed on the same day.

Application Procedure

Applying for short-term loans is easy, simple, and completely online. Simply fill the available online forms in 5 minutes and the loan website will give you a decision promptly if you have been accepted for the loan. The team of professionals working for the money-lending site will then verify your application and transfer your funds within an hour. Most moneylenders are committed to responsible lending. This is why they will perform a number of affordability and credit checks before providing you with a loan. In general, they will verify your salary and payment capability to determine if you will be able to repay what you borrow and speak with you directly before finalising the transaction.

No Penalty on Early Repayment

One of the best benefits of short terms loans is that there is no penalty fees if you repay the loan early. Moneylenders understand that you want to be rid of your loans fast, and this is why they do not charge you extra fees for early repayments. They also will not add the interest of the remaining days to your dues.

Lending with a Sense of Responsibility

Aside from the credit checks that moneylenders make as part of their responsible lending commitment, they also verify the following details about their customers:

  • More than 20 years old
  • Resident of the UK
  • Currently employed with a minimum salary of £750 per month

Reviews of Online Short-Term Loans Websites

Are you in need of a short-term loan? Searching for reliable websites from where you can obtain the money you need to manage your urgent needs? We offer credible and unbiased reviews of some of the top short-term loan websites available online, so that people who are in urgent need of cash will know where to go to obtain a short-term loan. Hence, if you are in need of a short-term loan; read our customer reviews, and find the best loan site for your needs. Happy Reading!

Affordability for Short-Term Loans

Short-term loans are those loans that are borrowed by people from moneylenders to be paid back at a specific date or payday. This is why these loans are also known as payday loans. The normal duration of short-term loans is anywhere between 2 weeks to 12 months, with payday payments or monthly instalments being made to the lender according to the terms of agreement of the loan. Although most people strive to avoid going into debt, there are circumstances in life where they are in urgent need of money with no alternatives other than opting for a short-term loan. Hence, short-term loans are best in cases of emergencies where immediate funds are required by an individual.

How to Apply For a Short-Term Loan

In today’s world, our lives are surrounded by technology and hence, rather than going to the moneylender in person, you can now fill a loan application online and get your money via electronic transfers. Most moneylenders simply require you to fill a form stating your details, as well as the loan amount and its duration. Once this process has been completed, you are informed in a short while if your application has been accepted and are provided with the money within the hour. Thus, the process of applying for a short-term loan is quick, easy, simple, and convenient and with the same day transfer feature; it is truly the best option for emergency expenditures.

Affordability Criteria for Short-Term Loans

Moneylenders aim to provide quick and easy cash to people in need. However, they are also committed to lending responsibly, and this is why they will make a quick verification of your personal details before providing you with the prerequisite funds. Some companies will call you on your phone as well to ascertain your identity. Aside from the verification process, moneylenders will usually also confirm the following things about the person who is borrowing the money:

  • Over the age of 20 years.
  • Legal citizen of the country.
  • Currently employed at a stable job.
  • Has a valid current or savings account in a local bank.
  • Has a functional phone number and valid home address.
  • Not eligible for a debt management plan or bankruptcy.

In addition to all these particular requirements, short-term loans have one more specification that must be met by an individual before their loan application is accepted by moneylenders. This criteria is that moneylenders only provide loans to those people who have an income that is more than or equal to the loan amount. This means that they check whether you will be able to repay the amount back to them at the end of the duration, before accepting your application. This is what is actually meant by affordability of a short-term loan, which can result in the acceptance or rejection of the loan. Although short-term loans are a good option for people who are in need of money, they must meet all of the criteria mentioned above before being able to afford the loan itself.

Credit Score for Short-Term Loans Explained

For most individuals, it is important to maintain a good credit score and history so that they can apply for a home mortgage or car loan later on in life. However, in the current times, if they are in need of urgent finances, they might opt for a short-term loan that can help them in maintaining their finances in the right way. So the question arises, how does taking out a short-term loan affect their credit score? Keep reading to find out.

Short-Term Loans and Credit Score

Individuals who want to take out a short-term loan do not need to have a good credit score as even people with bad credit rating are provided with short-term loans. This is because the eligibility and affordability criterion of a short-term loan is not based on a person’s credit rating. It is based on a number of other factors that most people can provide and validate in order to be eligible for the loan. The key criteria for a short term loan is that the borrower should be more than 20 years old, should have a job, should be a resident of the country and should be present within the country during the time duration of the loan. Thus, credit score has no role to play in the taking out of a short-term loan. However, the way you handle your short-term loan can determine and affect your credit score. There are both, positive as well as negative aspects to this scenario.

The Cons

Let’s start with the bad news first. Although a good credit score is not a prerequisite for a short-term loan, it can be influenced by the way in which you tackle your loan. This means that if you are late on your payments and are unable to make them in time, this will reflect badly on your credit history. Additionally, in the case that you cannot make payments, the lender may ask for assistance from debt collectors to get the money from you. In this case, debt collectors process the case and contact a number of credit providing institutes before coming to you for your due payments. Thus, this will reflect badly on your credit history and lower your credit score. Another con of short-term loans is that many credit-providing agencies review your credit history and find you to be an unsuitable candidate, simply because you have taken out a short-term loan in the past. The reason for this is that they see your finances as being unreliable and fluctuating, which means that you may not be able to pay back whatever they will lend to you in the future.

The Pros

On the plus side, if you are able to meet all of your payments, it can reflect on your credit history, making you a reliable and committed individual who takes responsibility for the loan repayments. Thus, when you take a short-term loan that you can pay back without any defaults or delays, it brings positive effects on your credit score, and improves it further. In spite of the cons, desperate times call for desperate measures and people sometimes have no alternatives other than short-term loans. However, simply remember to pay back your loan on time and you will be able to maintain your good credit score without any hassle.

Interest-Rate-CalculatorFirst Colonial Allows You To Make Quick Comparisons Between The Rates Offered By Different Loan Lenders So That You Can Choose The Best One To Fund Your Urgent Needs! All short term loans, as the name suggests, are provided by lenders for a small duration of time, after which, they have to be repaid. In most cases, the repayment is usually done after the borrower has received their next paycheck. This is why they are known as payday loans.

APR Rates for Payday and Short Term Loans

Being short-term loans, payday loans often have high APRs or Annual Percentage Rates. However, the annual rate of interest varies amongst different moneylenders and thus, it is important to choose the rates that provide you with the best value for your money.   First Colonial Provides You With Comprehensive And Accurate Reviews Of The Leading Short Term Loans and Payday Loans Lenders Within The U.K. So That You Can Make Comparisons Between Their APR And Decide Which Rate Is Most Suitable To Your Needs!

Terms and Conditions

Just like all other loans, payday loans also have their terms and conditions based on which, loans are provided to individuals to finance their immediate needs. These include:

Short Term Loans Basics

Some of the most basic terms that apply to all short term loans and payday loans are:

  • The maximum loan limit for a payday loan offered by moneylenders varies from £1000 to £2000, whereas the minimum limit can be from £100 to £200.
  • The time for repayment of the loan can be from 2 weeks or 3 months to 12 months, depending on your particular needs.
  • The cost of your loan or the rate of interest will vary according to the amount of the loan you take, as well as the duration you take it for. This means that the more the amount and the more the duration, the higher the rate of interest and overall cost of the loan.

Loan Fees

Most payday loan lenders will aim to make the process simple and transparent. This is why they charge no hidden fees on your loan. A payday is free from:

  • Annual fees
  • Draw fees
  • Early repayment fees
  • Application fees
  • Fast funding fees

However, each missed payment may be charged with a small penalty fee and your bank may charge you with a Non-Sufficient Funds (NSF) fee if the lender has debited your account in case of insufficient funds.

Terms of Repayment

Payday loans are usually repaid by one of two methods: Debit Card – You can schedule your payments in advance and they will be deducted from your debit card at the due dates without any additional charges. Direct Debit Authorisation – For people who do not have a debit card, they can authorise the lender to collect payments on fixed dates directly from the bank account. In spite of its high APR, and terms and conditions, payday loans remain as the best and fastest way of obtaining money in emergency scenarios when no other financial aid is available.   If You Are In Need Of A Payday Loan or a Short Term Loan, Read Our Payday Loan Lender Reviews At First Colonial, And Select The Ideal One For Your Monetary Requirements!

A short-term loan is a loan in which you can borrow a limited amount of money for a certain period of time. This ranges from a couple of weeks to a few months – the exact loan term will vary with your chosen lender. Since this sort of loan offers a number of flexible repayment options, it is quite a popular option among the consumers. If you are planning to sign up for a short term loan, you should be aware of the various laws related to lending, repaying, qualifying and so. The exact clauses may vary with your lender, but a general description of some laws is given here.

Eligibility Requirements

Generally, you have to be a UK citizen to acquire a short term loan with most lenders, but there are some exceptions. Your age must be 20 years or greater and until you have fully paid back the loan, you have to reside in the country. You must be employers and your monthly income should be £750 or more. You must also have a valid bank account, which has to be linked to a debit card. This card will be used for repaying the loan amount.

Loan Limit

There is a limit on the maximum amount you can borrow. This can be anything between £50 to £1,000, but the cap will vary with your chosen lender.

Same Day Transfers

The application process of a short term loan is really short and can easily be accomplished online without the need for visiting your lender. These loans are meant for quick emergencies and the funds are transferred into your account within the same day.

Repayment Option

When you acquire a short term loan, your repayment has to be made through a debit card. With some lenders like Peachy, you also have the option to repay your loan through cash and bank transfers.

Repayment Period

You have to pay back your short term loan within the term defined in the contract. If your loan is of the payday type, the repayment period will be between 14 and 30 days. In the day, you get your pay, you will have to repay the borrowed amount to the lender. With other short term loans, the repayment period usually last around three months.

Early Repayment Penalties

As long as you choose a reputed lender, you will not be charged any additional penalties for paying off your loan earlier. Doing so allows you to repay the loan at a lower interest amount than what you initially signed up for.

Delayed Payments

If you miss the payments by any chance, there is a penalty involved which is around £10 to £15. However, this amount is not charged until midnight of your due date. If your lender fails to take payment from your debit card, you will be contacted and notified.

Rollovers

Previously, you could rollover your loan a certain number of times. Under the new rules, you can only do it twice.