Short Term Loan
What is a Short Term Loan?
A short term loan can also be known as a High Cost Loan, Bad Credit loan, Payday Loan, Online Loan and No Credit Check Payday Loan, but essentially they are all the same thing.
Short Term Credit or Payday loan is classified by the FCA as a credit agreement in which;
- The APR is 100% of the loan amount or more
- The loan agreement is for 12 months or less
- The loan is not secured
- The loan is not provided by a “Community Finance Organisation”
What happens when you apply for a short term loan?
Most short term loan providers offer an online application process and can usually give the decision the same day. As it is all online the transfer of funds can also be done the same day meaning you can get the cash when you need it most.
Because short term loans are often applied for by people with a low or “bad” credit rating, the applications are underwritten with affordability in mind. This means that people with a previously bad credit rating can still apply. There are various checks performed on each application and here at QuidMarket we process the applications manually, so online some lenders, there are no automatically funded applications.
All applications for a Short Term loan, bad credit payday loan or a quick QuidMarket pay day loan go through a number of checks, including an affordability assessment, anti-money laundering and anti-fraud checks.
Comparing Loan Options
As with any financial commitment, it is always best to compare options before signing up to ensure you have the best option available to you.
There are many ways to compare loan options available. Various websites (known as Price Comparison websites) can do all the legwork for you so you can easily find the Credit options that best suits your needs depending on what criteria is important to you.
To compare the Credit options, you will need a few bits of information handy – things like the amount of Credit needed, the length of time you intend to hold the credit for and various personal information.
Here are a few comparison websites – QuidMarket is not affiliated or endorsed by any of these – always double check to make sure the comparison website you use is impartial and independent.
For advice on how to use Price Comparison websites and what to look for, read this article on Money Advice Service website – www.moneyadviceservice.org.uk/en/articles/price-comparison-sites-guide.
How to decide if a short term loan is right for you?
There are many factors to consider when comparing loans, especially when you are applying for High Cost Short Term credit.
As Short Term / Alternative lenders have to display their interest charges as an APR (Annual Percentage Rate) this can sometimes be misleading and confusing for customers.
Because a short term loan with QuidMarket is only designed to last a short amount of time the APR does not reflect the true cost of the credit. It is a bit like advertising a hotel room with a yearly rate when customers are wanting to book it for a long weekend!
To get an idea of what you will be paying on your short term bad credit payday loan pay close attention to the monthly repayments and the total amount repayable to work out if the loan is affordable for you.
If the cost of credit is not the most important factor, then pay attention to other things that may be offered by the lender – you may be able to get different rates if you have a Guarantor for example.
Short Term alternative lenders mainly offer “unsecured” credit. This means the loan is not secured against property – car finance, for example, uses the car as security against the loan, a mortgage uses the property.
Unsecured Credit is a higher risk for the lender and so again, the costs may be higher – consider using a secured option that may give you more flexibility and be more affordable.
How does QuidMarket compare?
Take a look at how a QuidMarket loan compares to some other Short Term High Cost bad credit payday lenders – all the information below was taken directly from www.money.co.uk 15.02.2018 – QuidMarket are not responsible for any changes/inaccuracies that may be displayed on external websites.
The Total Amount Repayable is based on £500 over 5 months
|Company Name||Amounts Offered||Available Terms||Representative APR||Total Amount Repayable|
|Lending Stream||£50 – £800||6 Months||483% APR||£786|
|Satsuma||£100 – £1,000||3 – 12 months||991% APR||£880|
|Sunny||£100 – £1,000||6 months||563% APR||£809|
|My Jar||£100 – £3,600||3 – 12 months||991% APR||£857|
|Wonga||£200 – £600||6 months||1,086% APR||£923|
|QUIDMARKET||£300 – £1,000||3 – 6 months||1297% APR||£867|
So, the main thing to remember before entering into a credit agreement is to make sure you have looked around for the best options available to you that fit your needs – some companies offer various amounts/loan terms – as with any application for credit, only apply for the amount you need and make sure the Total Amount Repayable is affordable for you.
Warning: Late repayment can cause you, serious money problems. For help, visit: moneyadviceservice.org.uk
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