Short-term loans are often confused with payday loans but in reality, the two are different, although both types of loan are not meant to be taken out over the long term like a personal loan. The short term loan is a suitable option if you need to get your hands on money fast, say in the case of an emergency where money is needed, but you want to borrow more than what a payday loan offers. Here we offer an insight into short term loans bad credit that explains what they are, what they may be used for and why you might want to apply for a loan with our help.
The Differences Between the Short Term Loan and Payday Loan
One of the biggest differences between the short term loan and the payday loan is the amount you can borrow and the term you take the loan over.
With the payday loan, you typically borrow a smaller amount and repay it back within one to three paydays or months. A typical payday loan means you can borrow anything from £100 to £500 and repay it when you get your wages paid into the bank. This can be spread out for up to three repayments if needed.
With the short-term loan, you are still borrowing a relatively small sum of money when compared to the personal loan, usually between £500 and £1,000. This is going to depend on the lender, of course, some might offer more and others might offer less. The repayments can be spread over a longer term than with the payday loan, usually up to 12 months but may be longer with some lenders.
What Interest Rates Can I Expect to Pay?
There is no one set rate of interest for short term loans. The rate of interest may depend on several factors such as:
- Your credit score;
- The amount you want to borrow;
- The length of time you want to spread the loan over.
If you do have a poor to bad credit rating you are not going to be offered the lowest interest rates around. Low-interest rates are reserved for people with an outstanding credit rating. The same will apply to any deals or offers. If you have a poor credit rating you will not be offered these. However, if you choose to search for a short-term loan with our help the lenders we work with do offer the most competitive rates for your circumstances.
The Benefits of Short-term Loans through Us
Short-term loans are among the most popular types of loans that are applied for and taken out by anyone with bad credit. This is because as only small sums of money are involved in the loans and they are repaid back fairly quickly, typically within a year, even though you may have a poor credit rating the lender is not risking a lot.
The Application Takes Just Minutes
One of the benefits to borrowing this way is that the entire loan application can be undertaken online from start to end.
It takes just a few details to get the application going and you only have to make one application to be in a position to search with a large panel of lenders. Even better is the fact that you do not have to search with lenders yourself as we can match you up with the lenders that we work with.
In Minutes You Know If You Are Accepted
As the application is made online it is fast. Within minutes, you will know if we can match you up with a lender. You can then continue with the loan process and look into the details of any loan we find with any of the lenders we work with and check to make sure that it is affordable for you.
One Application Search with a Panel of Lenders
Did you know that by simply making searches and applications for loans with different lenders you could affect your credit file in a negative way? This is because every time you apply for credit a mark is made on your credit file. Keep applying and being turned down and you are making matters worse for yourself as lenders know that you keep applying and keep being turned down. This does not happen if you allow us to match you up with a panel of lenders as only one application is made. If one lender cannot offer you a short term loan we move on to the next one.
The lenders we work with will make a check on your credit file. This is the law in the UK, but at the same time, they will also look into your personal circumstances at the moment. This includes the amount you have coming in and going out. If the lender thinks that you can afford to repay the loan they will offer one to you regardless of your having a less than perfect credit rating.
Why You Might Need a Short-term Loan
You can apply for a short term loan for just about any reason. A loan of this nature may be able to provide you with the money you need within a day if you are approved.
Short-term loans might come in handy in any instance where you need to get hold of money fast for an unseen event that occurs. For instance:
- A large bill of a few hundred pounds might drop through the letterbox but you don’t have the funds to cover it immediately;
- A large appliance such as your fridge-freezer might break down and you need the money to go out and replace it;
- You might need to pay out for a good used car or a new one if yours has broken down and is beyond repair.
What Are The Criteria to Apply for Short Term Loans Bad Credit?
Some criteria has to be met before applying for short-term loans regardless of your credit rating. With our range of lenders that criterion is:
- You are at least 18 years old;
- You hold a UK bank account;
- You hold a debit card attached to the card;
- You have the ability to set up a direct debit for money to be taken out of your bank;
- You have a regular income coming in.
The Pros and Cons to Short-term Loans
Just as with any type of loan, there are some pros and cons to consider with short-term loans.
The short term loan is one type of loan that is relatively easy to get approval for even if you have a poor credit rating. This is because you are not borrowing over the long term and the amount of money you are borrowing is small in comparison to what someone might borrow who takes out a guarantor loan or a personal loan.
A short term loan is simple to apply for online and generally, all aspects of the loan are undertaken online. This means that the process is quick, there is no waiting for papers to be mailed out and sent through the post, and you know within minutes if you have been approved. Money may be paid into the bank the same day or within a couple of days depending on the lender.
Short-term loans usually come with a higher rate of interest than what you might be offered with a personal loan or guarantor loan. Of course, the interest rate is usually higher on loans for those who have a poor credit rating anyway, as they are perceived as being a bigger risk.
Short-term loans may work out expensive in comparison to other loans, depending on how long the loan is taken over. The least amount of time the loan is taken over, the less interest you will pay if the loan interest is calculated on a daily or weekly term.
When considering repaying the loan also consider any fee. This also covers any early repayment fee if you can afford to pay off the loan early.
Short-term loans do not generally permit you to borrow thousands of pounds. If you need to get hold of a larger sum of money you might want to apply for a guarantor loan, secured loan or personal loan, depending on just how bad your credit rating is.
We can help you to find the most apt short term loans bad credit for your personal circumstances. We work with a range of lenders who will take not only your credit history into consideration but also your current circumstances. The lenders we work with offer affordable loans with competitive rates of interest. You could apply with just a few details and know within minutes if your loan has been approved. If all goes well the money could be paid into your bank account on the same day or the next day.