Open banking is the term used to describe a series of reforms which made it safe and secure for customers to share bank details with regulated third parties. This has revolutionised the financial sector, opening up the field for third party apps and online banks to offer a huge range of money management services to […]
Quick Short Term Loans UK – Fast Online Decision
There are a lot of different words out there for credit in the world of personal finance, and it can be a bit confusing if you’re just looking for a quick short term loan for a purchase or to pay a bill. That’s why we’re here to explain to you what we mean by quick short term loans, how they can help you and what it means when you take one out. So, could a short term loan be the perfect way for you to get the credit you need and take the next step on your journey to financial freedom? Let’s take a look.
What is a short term loan?
A short term loan does exactly what it says on the tin: It’s a loan designed to be taken out and paid back over a short period, usually six to twelve months. Short term loans are usually for relatively small amounts of money, between £100 and £5000, and are designed to be as flexible as possible so that you know what you’re getting ahead of time, you know what you’re paying, and you know how long you’ll be paying it for. Unlike larger loans from traditional lenders like banks, the loan is entirely in your hands: You can choose how much you borrow, we don’t insist on a certain amount; you can choose how long you want to borrow it for, we don’t have prescriptive repayment terms; and you can choose how you use it, we don’t judge your suitability based on why you want to borrow. You can also expect to be approved for your loan in as little as 24 hours and you can have the money in three days, though you may even have it in hours or minutes.
What are quick short term loans for?
While there are many reasons why someone might want to access finance, much of the time it’s just a small and unexpected expense that you can’t cover with your savings or the ready cash you have. If your boiler breaks down, you get hit with an unexpected charge or fine, your car loses a tyre or you realise you can’t quite pay the water bill, short term loans are there for you. None of these expenses are massive or require a huge amount of checking and budgeting, but they do require a fast response that many high street lenders can’t match, which is where short term loan companies come in. Quick short term loans are that little extra sticking plaster that can make a disastrous event like the ones above more manageable for a stressed and overstretched family trying to make ends meet.
How can a short term loan help me?
There are hundreds and thousands of places to get traditional finance, such as high street banks and lenders, but if you’re looking for finance from those places it’s often a tricky and lengthy process. We understand that, if you’re just looking for a quick fix to bridge a gap, you don’t have time to wait a week or two for the loan company to decide whether you can borrow from them or not. You also don’t want to be paying more money for the loan than you need to. Most high street lenders will be very prescriptive about exactly how much money you can borrow and for how long, meaning you might end up having to borrow more money than you wanted to and for longer, which costs more in the longer term. While the interest rate may be lower, the total cost of the loan is higher. Transparency can also be an issue with high street loans, and it can be difficult to work out how much you owe and how long for.
High street banks have a well established systems for making checks and decisions over who they will and won’t lend to, but unfortunately life doesn’t stick to the rules and you can often find yourself needing finance in a hurry. You can’t be without hot water for two weeks while the bank works out whether it wants to lend you money to fix the boiler, and you can’t wait for Monday before you get the money you need to get your car fixed, so you’re often out of luck with traditional lenders. That’s where quick short term loans come in. Because you’re not trying to borrow very much money, and because you’re not borrowing against the value of an asset, short term loans can be offered to you very quickly. You can check if you’re eligible for a short term loan in as little as a few minutes using the online calculator, and once you make a successful application you could have the money in your account in two to three days, or as little as a few hours.
A third way in which quick short term loans can offer a major advantage over their traditional counterparts is in the severity of the checks that the lender needs to perform in order to see if you are eligible. First, there’s one truth that needs to be stated: There’s no such thing as a guaranteed loan. It’s a legal requirement in the UK that a credit check must be performed on anyone that wants to take on finance to ensure that the amount of debt is affordable, and not everybody will pass those checks. However, not all credit checks are equal. Most quick short term loans are small enough that we can perform a ‘soft’ credit check rather than a ‘hard’ one, which doesn’t leave a mark on your credit score because we only look at your report and don’t actually contact the credit agency. This also means that the check takes much less time, as we can do it quickly and don’t have to wait for the agency to get back to us.
Does that mean I can get a quick short term loan if I have bad credit?
People with a bad credit rating, or people with no credit rating at all such as recent immigrants, are often concerned mostly that they won’t be able to access any finance. This can be a major issue for living a normal life, as it can not only prevent you from accessing loans and mortgages but also things like phone contracts or hire purchase agreements on cars. For someone with poor or insubstantial credit history, the biggest barrier to finance is the credit check, which can result in a hard ‘no’ from the lender just on that basis. That’s why it’s good that short term lenders don’t just rely on your credit rating to make their decisions.
When you apply for a quick short term loan with us, we do more than just bring up a credit check and decide on that basis. We’re in touch with a wide range of creditors of every size and type, so we can take a much wider view of your financial position than other lenders. Not only can we put you in touch with a more diverse group of creditors who might be more willing to lend to you, we also take your current circumstances into account when we make the decision to lend. As long as your income is higher than the minimum monthly amount, we stand a good chance of being able to lend to you no matter what other issues you may have. That said, it’s also important to be sure yourself that you can afford the payments that you’re committing to. While we will take many factors into account when making our decision, such as your food and transport costs, your rent or mortgage and other existing loan payments, you must be honest when answering those questions to avoid getting into problem debt.
What kinds of quick short term loans are there?
So far we have talked about short term loans as if they are one monolithic thing, but in fact there are different types of short term loan for different scenarios. The two major types are short term personal loans and what are commonly known as ‘pay day loans’ which last for one month. The major difference is the length, but the way they are used is also important, so you should think carefully about what you need before you take one out.
Payday loans are probably the most well known type of quick short term loan, having received a lot of press attention and having exploded in popularity over the last decade. This type of loan originated, as it sounds, because it was originally designed to tide a person over until their next payday if there is any shortfall in the amount of money they needed. As such, it was designed to be taken out in one month and paid back at the same time the next month, plus interest. As a result, the big difference here is that there are no instalments and the entire loan is paid back in one go, so there’s only one lump sum of interest and not several interest payments.
While payday loans have gained a reputation for being expensive, in fact there is a cap of 0.8% worth on interest on the total loan amount per day of the loan and the total amount of fees and interest can’t exceed 100% of the original loan’s value. That means many of the horror stories you may have heard are no longer true, and payday loans actually are affordable. All of this together means that payday loans are a very transparent and upfront method of borrowing money, with all the costs made clear up front, and can’t cost you any more if you pay on time. Something that’s attractive for borrowers looking for a quick fix.
Longer form short term loans, the ones that last from one month to one year, are much more similar to traditional loans except for that flexibility and accessibility mentioned above. They tend to have lower interest rates than pay day loans and obviously you have longer to pay them back, but as a result you will have to pay more individual chunks of interest rather than just one and you have to be sure you’ll be in a position to keep paying your instalments as far ahead as a year from when you take it out. These are better for larger amounts of money or for people who prefer to budget for the long term.
How can I boost my chances of being accepted?
As we’ve said before, while quick short term loans are easier to get than traditional loans, it’s not possible to guarantee that every person will be accepted for every loan. Luckily, there are thing you can do to boost your chances of meeting the affordability criteria, so even if you’re not quite there yet you can plan to be able to get a short term loan in the future.
One of those things is to ensure you only borrow what you need. Ideally all your loan repayments shouldn’t take up more 30% of your take home income, so if you’re finding that the finance you’re proposing to take out takes you beyond that point it’s a good idea to scale back your borrowing. If you are spending too much on loan repayments it can count against you when you submit your financial information, so if you find yourself rejected for finance it can be a good idea to wait and pay down existing loans before you take on any more commitments.
Another option that may work for you is to try to build your credit score. Ultimately, your credit score is the only guaranteed ticket to better finance options, and while it may seem like an impossible task to get it into a good position there are a few things you can do to get some easy wins. Making sure all your info is correct on your report is one of those things, because a sure fire way to get marked down is a mismatched name or birth date. It’s also a good idea to get yourself on the electoral register even if you don’t vote, because that proves to lenders that you definitely are who you say you are. Again, tackling the amount you borrow is also a good way to address a poor credit score. Lenders don’t like it if you use too much of the credit available to you, so it’s good practice to use less than 50% of the total amount you’re able to borrow at one time and your score will improve if you do.
Quick short term loans are designed to be flexible and accessible, so meeting basic requirements should be enough to get you the finance you need. As long as you’re over 18, a UK resident and employed with a steady income you should be a good candidate for a short term loan.
Is a short term loan right for me?
A quick short term loan can be your ticket to financial freedom, but it’s important to make sure you’re borrowing money for the right reasons and in the right way. It’s very important that you are able to make instalments, or the single final payment in the case of payday loans, because unpaid debts can quickly spiral into problem debt and can have a serious impact on your credit score. One way to avoid this is to have a buffer in place to pay off two instalments at once, just in case you suddenly find yourself short of cash. You can also over pay to ensure there is always one extra instalment in the bank in case you miss one, or you can set up alarms and notifications in your calendars to stop you forgetting.
It’s also good to remember that short term loans almost always attract higher interest rates than traditional loans from high street lenders, which is a trade off for them being more flexible and accessible. They are not designed for long term or repeated use, and if you find yourself relying on them regularly to pay back unexpected expenses it could be a good idea to seek advice from a debt support charity to see how you can reign in your spending.
It’s also a good idea to keep any eye out for fees that can be charged on your loan, so you can be sure you know everything that you’re paying. These fees can crop up in a number of areas, including but not limited to: Broker fees for setting up the loan; Transfer fees for adding money to your account or paying off debts; Late payment fees if you end up missing payments but paying within the allowed leeway period and Fast payment fees, if you opt for the fast payment system that will allow you to receive your money faster. While none of them will be crippling and most will be only simple administrative costs, some brokers make a point of saying that they don’t charge any fees at all, so it could make the difference between a good deal and a great deal.
Latest From Our Blog:
Before lockdown, card payments were already becoming the norm in high-street retailers and local shops alike. But the sudden closure of physical retailers and the need for stringent hygiene measures due to the pandemic has hastened the decline of cash payments. Not only are more consumers paying for things online than ever before, but card […]
Pretty much everybody has had their lives majorly disrupted by the global Covid-19 pandemic, however this unprecedented worldwide event has affected parents much more than most others. Around the world, schools have been closed for several months now, and the usually action packed summertime has been replaced by a tentative crawl out of lockdown. It […]