Short Term Loans – Apply With Little Loans

Life can be unpredictable.

From broken boilers to a car that suddenly refuses to start, sometimes we’re hit with unexpected costs.

When savings don’t quite cover these inconveniences, you may consider taking out a short term loan to keep you afloat and give your funds a little extra boost.

What is a short term loan?

A short term loan is a personal loan that usually consists of a low amount and a short repayment period.

How much money can I borrow, and over how long?

Little Loans work with a trusted panel of lenders, offering loans from £100 to £10,000, which can be repaid between 3 and 60 months.

Always make sure that you are able to afford monthly repayments - plus interest fees - and never borrow more money than you need.

What is the difference between a short term loan and a payday loan?

Payday loans are a certain type of short term loan and are designed to tide you over until the next time you are paid. They usually require full repayment within a month and tend to come with high interest rates.

Other short term loans offer a variety of longer repayment terms. Spreading the cost of your loan by repaying it over a extended period of time may make it more affordable.  While repayment costs might be reduced, you should bear in mind that you could end up paying more interest, even if the rate is lower.

Who can apply for a short term loan?

To apply for a short term loan with Little Loans, you must:

• Be aged 18 or over;
• Be a UK resident with a UK-registered address; and
• Have a UK-issued bank account and valid debit card.

Lenders will also look into your employment status and credit history.

Can I apply for a short term loan with a poor credit rating?

While having a poor credit rating may make it harder for you to be approved for a short term loan, it is not impossible. There are certain lenders on our panel who specialise in loans for those with ‘bad’ credit. Please bear in mind that loans for those with a low credit rating are likely to come with higher interest rates. You may also find that you are restricted when it comes to choosing how much money you are able to borrow.

Before you commit to any financial product, it’s important to consider the cost of monthly repayments. Falling behind on or failing to make your repayments can lead to additional fees, financial stress, and a decrease in your credit rating.

Can the money wait? Why not work on improving your credit rating before you apply?

I have no credit history – can I apply for a short term loan?

Sometimes, your credit rating might be low because there is simply no credit history available for you. This may be the case if you have never borrowed credit, or you are young and haven’t paid bills before.

It may still be possible for you to get a short term loan with little-to-no credit history however, to better your chances of approval, you may wish to boost your credit score first.

I’m unemployed – can I apply for a short term loan?

When reviewing applications, lenders will pay particular attention to your income and employment status. Being in receipt of a regular income suggests that you are more likely to be able to manage and keep up to date with monthly repayments of your short term loan.

If you are unemployed, it is unlikely that you will be approved for a short term loan.

You can read more about loans for those who are unemployed here.

How can I improve my credit rating?

Improving your credit rating may increase your chances of being approved for financial services in the future.

There are a number of things that you can do to improve and build up your credit rating.

• Check your credit report carefully and rectify any errors. Noticed a mistyped postcode or address? Believe it or not, this could be negatively impacting your credit rating!
• Sign up to the electoral register. This makes it easier for lenders to identify you and your address.
• Avoid financial association with others. For example, if you share a joint bank account with somebody who has a low credit rating, it’s possible that your own may suffer as a result.
• Ensure all of your bills and existing credit commitments are paid on time.
• When you apply for a financial product, the lender will run a ‘hard search’ on your credit history – too many hard searches over a short period of time can have a negative impact on your credit rating.
• If you have a credit card, refrain from using it to withdraw cash, as this is known as a ‘cash advancement’ and may suggest poor money management, particularly if multiple withdrawals are made over a short period of time.

How does the short term loan application process work?

Little Loans is a broker, not a lender.

We have summed up our journey in six simple steps below.

1. Select how much money you would like to borrow, over how long. Complete our online application – this should take no longer than 5 minutes. Please be sure to answer all questions as accurately as you can - the information provided will determine the outcome of our checks.
2. Once you have completed the application, you can take a breather while we get to work! We scan our panel of lenders to see if we could match you to a suitable short term loan. Our soft search eligibility checks will give you an idea as to how likely you are to be approved for a loan, without impacting your credit rating.
3. It’s a match! If our eligibility checks reveal that you have been pre-approved for a short term loan with one of our trusted lenders, you will be automatically redirected to their website. They will guide you through the rest of the process.
4. Our lender will require some additional information from you, including payslips, and proof of address. This will enable them to run a ‘hard credit search.’ It’s worth remembering that hard searches DO show on your credit history.
5. If the lender’s hard credit search reveals that you have been approved for a short term loan, you will be sent a ‘loan agreement.’ You should read this thoroughly and consider the monthly repayments before deciding whether or not to accept. Happy? You can go ahead and accept the loan. Depending on the lender and your bank’s individual policies and procedures, your money could be sent within minutes.
6. Clear the balance of the loan and any accrued interest via monthly repayments within the set term.

What happens if I struggle to make the repayments on my short term loan?

When faced with this situation, it can be tempting to bury your head in the sand, but please don’t suffer in silence.

If you are unable to make your pre-agreed monthly repayments, you must make contact with your lender as soon as possible. There may be things they can do to help.

The sooner you seek help, the sooner you can take the first steps towards regaining your financial control and confidence.

Little Loans have teamed up with debt charity Step Change to provide a free, online quiz that you may find useful. You can take the quiz here, with no impact to your credit rating.