Many people around the UK are suffering financial difficulties at the moment, and knowing what help is available in the form of loans and grants is the best way for Brits to be financially prepared for turbulence. There are a number of different types of loans available in the UK; short term loans are designed to offer quick cash to those who find themselves in need.
Confusingly, while there are a number of different types of loans available to borrow over the short term, including payday loans and logbook loans, there is also a type of loan specifically called a short term loan; this is what we’ll be discussing today.
What is a short term loan?
A short term loan is a specific type of loan offered in the UK with a relatively short repayment period, usually up to around 12 months. Short term loans are designed to help borrowers to pay for emergencies and other unexpected costs as and when they arise, without falling into long-term debt. They are often the preferred type of short term loan because the monthly repayments over the course of 12 months can often be quite affordable, and they do not require collateral.
Is a short term loan the same as a payday loan?
Short term loans and payday loans may sound like the same thing – both are types of loans offered over the short term – but they refer to different types of loans. Payday loans are usually very short term, needing to be paid back in full within the next 30 days; this is why they’re called payday loans, because they’re supposed to be paid back when you get your next paycheck.
Short term loans, on the other hand, offer a repayment period of usually between 2 and 12 months. While this can make it easier to pay back a short term loan each month, it can also make short term loans more expensive overall, because the interest rises over a longer period.
How do I apply for a short term loan?
Thanks to the internet, applying for a short term loan is quick and easy and can be done online. Before applying for a short term loan online, you should research lenders and check interest rates, and decide how much you want to borrow and for how long. Remember that the quicker you pay back your loan, the less interest you’ll pay – but it’s also important to make sure your repayment goals are realistic.
Short term loan lenders will perform a credit check before offering you a loan, but they will not require collateral.
How much can I borrow?
It’s usually possible to take out short term loans for between £50 and £2000 over a three month period, though the exact amounts offered will depend upon your lender. This makes short term loans a good choice for covering small emergencies including boiler breakdowns and car trouble; you won’t usually be able to borrow enough in a short term loan to cover larger expenses, however – you will need to consider a long term loan for these.
Who are short term loans direct lenders?
A short term loan direct lender is a company who can lend you money in the form of a short term loan directly themselves. All short term loan direct lenders should be authorised by the FCA and should have transparent interest rates and terms and conditions available for you to read through before you sign up to a loan.
Short term loans are offered by a wide variety of lenders in the UK including both banks and specialist loan providers. It’s important to compare short term loans before you choose who to borrow from because interest rates and repayment terms can vary wildly between lenders.