What is a short term loan?

A short term loan is a small cash loan that you can access quickly to cover emergency costs. They can be useful if you’re caught short before your next paycheque comes in and are repayable over a short period of between 1-6 months.

Most people who take out short term loans use them to cover costs like car repairs, unexpected costs like school trips and uniforms, or replacing essential household appliances. Imagine being stuck without a washing machine for weeks, or struggling to get to work without your car because you don’t have enough in your account to cover the repairs. This is where short-term loans can be useful.

As well as being very convenient, short term loans can also be expensive, with higher interest rates than some other forms of credit.

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Representative Example: Borrow £400 for 4 months: 3 monthly repayments of £156.09 followed by a final repayment of £156.07. Total repayment £624.34. Interest rate p.a. (fixed) 288.35%. Representative APR 1,267.9%. 

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Warning: Late repayments can cause you serious money problems. For help, go to www.moneyhelper.org.uk.