Short Term Loan Advice
A short term loan is where the amount borrowed and the interest is paid back in less than a year. It’s not like a bank loan, in that you don’t pay a short term loan over a number of years and it often comes with a higher APR. The borrowing amount is usually low, starting from as little as say, £100, and going up to around £1,500 or higher in some cases.
Why get a Short Term Loan?
Short term loans may be appropriate for people who all of a sudden find themselves with a big expense they feel they can’t avoid, like a home repair or a car repair. They might also be helpful for people who don’t get regular work and need something to tide them over until their next paycheque when they can pay back the loan and the interest.
Usually, this type of borrowing is what’s called an unsecured loan. Which means you aren’t borrowing against something you already own such as a car. Should you not be able to pay a loan back, the items which you secured the loan against will not be repossessed as payment.
Top kinds of Short Term Loans
There are many different shapes and sizes of short term loans. But there are a few main varieties that dominate the market:
Payday Loans. Typically, they’re paid back in one lump sum when the borrower gets their pay packet. At LoanPig, we offer these as you can receive your loan the same day or next working day. Repayments are taken out of your bank account, often automatically by what’s called a continuous payment authority.
Instalment Loans. The loan application and approval process is all done online. You pay back over several months, but usually no longer than a year. Online loans can also get the money into your bank account quickly – sometimes within minutes of it being approved.
If you’re worried about repayments you can speak to the Money Advice Service for free impartial advice.