What are Short Term Loans?
Short Term Loans enable you to borrow a small amount of money to tide you over for a short term, usually until you receive your next pay cheque. They are a hassle free way to get the cash you require, taking the pressure off a temporary financial crisis.
Short Term Loans can be a swift solution
If you find yourself in urgent need of money but the coffers are empty and you don’t have a credit card or overdraft to fall back on you may consider the option of Short Term Loans. You are expected to pay back any money you borrow within a few weeks. The amount of money you can borrow is modest, too. Most lenders won’t offer more than £1,000 and usually much less, especially for first-time customers.
One of the attractions for many people of Short Term Loans is that the lending companies offer to pay the required money into their accounts within one working day, some even offer to do so within an hour (after approval). The request can be made and processed online.
Imagine if your car broke down and you knew you’d be unable to get to work to earn your pay without it. If you had no access to any other funds, you might consider a short term transaction like this, especially if every day without your car lost you income. Without the extra money your shortfall would only get worse. This is one example where Short Term Loans could prove a life-saver.
It pays to be careful
In effect, under the Short Term Loans system you are borrowing from yourself. You are giving yourself an advance on your own salary. It is essential you feel confident you will be able to live comfortably on your next pay cheque, minus the amount you have already borrowed from it. If you find that paying back the money means you end up running short again, you may get into a situation in which you are constantly firefighting, borrowing month after month and losing more and more money.
Because the transactions are small and run for such a short length of time, the lenders APR’s seem very high. To take a typical example of £100 borrowed for up to 28 days, the borrower would have to pay back a total of £125. This represents an interest rate of 1,737%.
If you can’t repay your short term loan in time, it may be possible to ‘roll it over’ so that the loan is extended. In this scenario, however, the interest would keep accumulating and a small loan could become a major headache, spiralling out of control.
Only borrow the money if you’re sure you can manage the shortfall in your next payment cycle.
Short term loans the easy way!
We have created a simple, yet informative comparison table of products, offers and services which makes it easy for you to choose the right provider for you. Click here to see a list of short term loans available from our panel of lenders