“We live in an imperfect world my friends. Cars break down, pipes burst, beards catch fire. These banana skins on the path of life can hit you where it hurts the most – your pocket. That’s when a short term loan can come to your rescue.”
Short term loans are classified as amounts ranging from £100 to £3,000 – borrowed over 1 to 3 months. Many lenders will extend these terms up to 12 months to make the payments easier to manage.
These short term loans are an alternative to the much maligned payday loans, which offer up to £1,000 for up to 31 days. The short lending time on payday loans means many customers default on their payment. By offering longer term periods, short term loans mean people pay less money each month in interest.
As the name suggests, short term loans are for short term borrowing; unlike personal loans or mortgages that are paid back over years. Due to smaller loan amounts, lenders will loan the money based on set criteria and your credit score.
This differs to other forms of lending where collateral, usually your home, is provided to secure the loan. Because there’s no collateral securing the loan, the penalties for not meeting repayments can be expensive and could affect your credit rating.
They can be helpful when a financial emergency arises and you need a cash injection to fix the problem. This could range from a broken boiler to fixing or replacing parts of your car. Both can be expensive and could leave you short at the end of the month.
Unlike payday loans, where you borrow and pay back the entire loan when you get paid, you can pay back smaller amounts each month so you aren’t left short the following month.
Money Guru is experienced, impartial and lets you save time and energy by making a single application to multiple lenders. By showing your application to the cheapest lenders first, we help you find the best deal available to you.
We also offer a loan comparison page. This gives you all the details you need to make an informed decision on which short term loan is best for you.
Before taking out any form of credit, always make sure you can afford the repayments. Failure to pay the lender back on time could result in extra fees being added to the repayment cost. If you find yourself in financial difficulties, here are a few sites that could help.