Short-Term Payday Loans

Financial stability is something we all aspire to attain; however, with today’s rising economic standards, this may be a hard-to-reach goal. With bills piling up, upcoming rent due, household expenses, and even the occasional emergency expense, we are often found facing a cash-flow gap.

As a result, many individuals turn to short-term loans in the UK due to its speed and convenience. Online short-term payday loans provide borrowers with high-level service and speedy processing methods.

Ready to Get Started? Apply for Up to £5,000

Apply Now

What Are Short-Term Payday Loans?

Online payday loans are short-term cash advances to use during emergency expenses. Borrowers are expected to repay these loans when their upcoming paycheque arrives. Due to their one-time repayment method, many may consider these loans to be risky. However, short-term loans help you escape the long cycles of any ordinary loan.

Bank loans are generally spread out to be repaid upon long terms of instalments, months, and sometimes years. This truly can become a financial burden, and sometimes when you find yourself unable to meet the scheduled repayments, you might consider taking out another loan to help with your first one. As a result, you are then stuck in a long loop of debt without any visible escape ahead.

Instead, short-term personal loans may be a viable option. These loans should only be used for short-term debt. They are designed to give you the opportunity to address immediate small-sum financial emergencies.

How Do Short-Term Loans Work?

Prospective applicants can apply for a short-term loan online or in-store with a direct lender. The application will require personal and financial information. If approved, the borrower may receive their funds in as little as one business day. Note that processing times vary based on the lender and your bank.

Short-term loans are meant to be repaid within two weeks or when your next pay date arrives. Quidable helps connect individuals to lenders who may offer them short-term financing.

How a Short-Term Loan Can Help

As the name implies, short-term loans are meant to be used on a short-term basis. Typically, these loans are obtained when you have an emergency that requires an immediate fix. For instance, short-term loans can be used to pay for:

Auto repairs

Medical bills

Home repairs

Rent or mortgage

Household bills

Groceries

Bad Credit Payday Loan

Typically, when applying for a loan, it is understood that you must have a strong credit score. Banks tend to implement extensive credit checks and rely upon your financial history to assess your loan eligibility. This may be a risk to many and a reason to rethink their loan decisions. Many loan customers often face unexpected situations that render them unable to cover their obligations and, in turn, lower their credit score.

While you might come across many advertisements suggesting the opportunity to locate payday loans and direct lenders with no credit checks, that is not usually the case. However, what may be available are bad credit payday loan direct lenders. These providers implement a credit check upon their applicants; however, they may not fully rely upon those results to provide credit decisions.

Bad credit short-term loans are sometimes an opportunity for those who have been rejected for loans by banks due to their low credit score. If you find yourself in need of some extra cash but cannot get the loan you want from the bank due to your credit score, then online payday loans might be a solution.

Perks of Online Short-Term Lenders

Payday loans direct lenders work to accommodate fast cash loans when consumers need them. Working with a direct lender means that you will not have to include any third-party involvement when applying for a loan. There are many advantages.

Speed

Online short-term lenders also aim to make the application process quick and hassle-free. The online form typically takes a few minutes to complete, and responses are received relatively fast. Additionally, if approved, the funds may be directly deposited into your account in as little as one business day.

Flexiblity

Short-term loans are meant to be accessible. As such, some online lenders may work with damaged credit applicants. These lenders may consider income alongside credit when determining eligibility.

Convenience

Online applications also offer more accessibility as they can be completed any time from the comfort of your home.

Cons of Short-Term Loans

Despite the appeal of short-term loans, there are some disadvantages to consider before applying.

High-interest Rates

Many short-term loans have high-interest rates, making it more difficult to pay back the full sum plus interest. This can cause many borrowers to miss payments and default.

Debt Cycle

Due to the high rates, many applicants obtain additional loans to pay off the original amount. This often causes borrowers to enter a cycle of debt that is difficult to escape.

Credit Impact

In the event of a missed payment or default, the borrower’s credit score may drop. This is because many short-term lenders report these delinquencies to the major credit bureaus.

Penalties

In addition to credit reporting, lenders may also charge additional late or missed payment fees to borrowers who fail to repay their loans. This can make it more difficult to pay the full sum.

How Much Would You Like to Borrow?

Tips for New Borrowers

When it comes to any type of loan, there are certain tips that you can follow to make the process smoother.

Never borrow more money than you need. If you are getting a larger sum of money than you need, then you will be obliged to pay back the amount with interest.

Do your research. Complete your research and study the loan options and rates that are most appropriate for you. Online loans give you the opportunity to conduct your entire search from the comfort of your own home.

Keep constant contact with your online lender. One of the best advantages of working with a direct lender is having the opportunity to communicate with them. Any questions you may have will be directly addressed straight from the source.

Read and understand your contract. When beginning any loan process, you must fully comprehend and analyze your loan terms and conditions. If at any point you are unsure about any aspect of the loan, reach out to your lender.

Repay on time. Always make sure to comply with your loan terms and conditions. Missing out on your loan repayment may be risky and dangerous as it may lead to extra fees or negative impacts to your credit.

Bottom Line

Short-term loans can be beneficial to individuals facing emergency cash needs. The funds can be used for various reasons, including rent, bills, or repairs. However, it is important to keep in mind that these loans come with high-interest rates. Therefore, it is essential to thoroughly assess your finances before applying for a loan.

FAQ

How Much Can I Borrow?

Short-term loan amounts range between £50 and £5,000. However, the amount you qualify for depends on your income, credit score, and the lender you choose to work with.

Lenders will conduct a credit and finance check to determine how much you can comfortably afford. As a result, loan amounts will vary based on the individual’s qualifications.

How Much Interest Will I Be Charged?

Short-term lending is regulated by the Financial Conduct Authority. The FCA has set the maximum daily interest rate at 0.8%. Nevertheless, short-term payday loans carry high-interest rates and APR. Standard APR can range between 18.7% to 1,576% depending on several factors.

Primarily, the APR will be based on the loan amount, term, and the borrower’s credit score. Additionally, the APR will vary by lender. As such, it is best to conduct thorough research before applying for any loan.

Can I Get Low-Interest, Short-Term Loans?

Some applicants may be eligible for low-interest, short-term loans. However, interest will depend on the lender, borrowed amount, loan term, and applicant’s qualifications.

Is It Better to Get a Short-Term Loan Online?

Online payday loan applications are sometimes processed faster than a traditional loan. Conventional loans may require longer periods of time for applying and processing. Moreover, if approved, it may take an extended period to receive your funds, which is an inconvenience when facing an emergency expense.

With online loans, you may start your loan request form from your home or smartphone. Due to its cyber nature, the loan request process is available at any time, as long as you have an Internet connection. This can be preferable to waiting at the bank.

Do I Qualify for Short-Term, Guaranteed Loans?

Unfortunately, short-term, guaranteed loans are nonexistent. Lenders cannot guarantee loans before they have assessed the applicant’s income and credit. As a result, all lenders will run a credit check before determining whether an applicant is eligible.

Therefore, it is important to beware of short-term lenders who advertise guaranteed loans as this may indicate deceptive practices.

What if I Default?

If a borrower defaults on a loan, they can face additional charges and negative impact to their credit score. Lenders may charge late payment and delinquency fees. Additionally, if the lender reports defaults to the major credit bureaus, the borrower’s credit score could significantly drop.

If you believe you will miss a payment, contact your lender immediately. In some cases, the lender may be willing to offer an extension.

Ready to Get Started? Apply for Up to £5,000

Apply Now