Short term loans and how to get the best rates
Short term loans have become very popular in the UK over recent years and their popularity is increasing annually.
In order to find out exactly why short term loans have become so popular, we need to examine what is driving the rise in applications in the UK market, why a short term loan can be a good idea and how to compare short term personal loans in the UK.
What is a short term loan?
A short term loan is simply a loan which has a shorter repayment period than a conventional long term or installment loan. For example, you may borrow £2000 from your bank for 8 months – this is a short term loan, as opposed to a longer loan for 3 or 4 years.
The main advantage of a short term loan is the repayment period. Instead of making payments over a lonng period of time as you would do with a long term loan (sometimes known as installment loans), your loan is repaid much faster, usually in 12 months or less.
What are short term loans used for?
Short term loans are normally used for unexpected expenses, such as household emergencies like a washing machine repair, plumbing issues or a vehicle breakdown.
Everyone experiences unexpected expenses and these can catch us off guard, especially when the family budget is tight and there is not a great deal of money to spare at the end of the month.
If you suddenly develop a problem with your car and the repairs are going to cost £1200, this can be a major problem. In circumstances like these a short term loan is a good solution.
Can I get a short term loan with bad credit?
The short answer to this is yes, although where you get your short term loan from may be affected by an adverse credit rating.
For example, if you have a poor or adverse credit rating your high street bank may not be so keen to approve a loan for you, in which case you will have to look for alternatives such as a payday loan.
Be aware of the interest rate if you do take out a short term payday loan as some companies charge much higher rates of interest than conventional lenders.
Shop around and compare different UK short term loan options before you sign anything. You should also be aware of your rights when applying for a payday loan and how to protect your data.
Short term loans with no credit check
Essentially there is no such thing as a UK short term loan with no credit check. Why is this? It is because a credit check is required by law for any lender in the UK.
The only alternative would be a loan shark which we strongly advise you not to do. if any UK company tells you they can provide you with a personal loan without a credit check then remember they cannot be operating legitimately. Stay with companies which are legal and licenced by the FCA, the regulatory body which covers lenders in the UK.