There are hundreds of reasons why you might need a little extra cash here and there – sometimes it’s just nice to feel financially safe, sometimes it’s necessary for last minute gift shopping, and sometimes there are real financial emergencies that just can’t wait. As long as you have a strong credit file, any cashflow issues can be solved quickly using a credit card or maybe even dipping into an arranged overdraft.
However, if your credit file isn’t that great – maybe you fell into a little financial trouble in the past and you’re waiting for the six year record period to expire – then borrowing money can be a whole lot trickier. Creditors are less likely to lend to you, even if you’re in a much more stable financial position now, and so when an emergency expense comes up, it can be quite daunting working out how you’re going to foot the bill.
Thankfully, it is possible to get a short term loan even if you have bad credit.
A short term loan is a small amount of money that you can borrow over a short period of time to help you meet unexpected expenses and manage your cashflow occasionally throughout the year. While you shouldn’t use short term loans as a secondary source of income, a small loan can help you meet an emergency expense if you won’t quite have the funds until you are next paid.
Instalment loans can be preferable as they spread the cost of your loan over a few months, typically three months but you can find short term loans with up to 12 instalments over 12 months, however the longer you borrow for, the more interest you repay. So, if you can afford to repay your loan using a payday loan rather than an instalment loan, it might work out cheaper in the long run.
While many mainstream creditors might decline your application if you have a bad credit history, short term lenders often understand that there are several reasons you might have bad credit, and some of them are probably outside of your control.
As a record can remain on your credit file for up to six years, it’s perfectly plausible that your financial situation now is very different to your borrowing activity over half a decade ago. Additionally, even if you do have bad credit, it doesn’t mean you aren’t able to afford your repayments, and it can be unfair that you are financially excluded from the same credit opportunities as those with a good credit history, especially in the case of an emergency like a flat tyre on the way to work or a broken washing machine.
Most short term lenders are online as it makes the whole application process much quicker, and the funds can be transferred almost instantly thanks to the Faster Payments Service (FPS). However, a good place to start is a short term loan comparison site – you are probably used to comparing car insurance or hotel rooms to get the best deal, and the same applies to short term loans.
Clear and Fair is an online loan comparison site which allows you to compare short term loans, even if you have a bad credit history. You can adjust the bar or enter how much you are looking to borrow, and how long you need to borrow the money for and then click compare. It’s super easy and the results are quick, so you won’t waste any time doing a quick comparative search before applying. We always rank our direct lenders in order of cost to you so the first option will always be the cheapest.
Of course, you should only borrow if you really need to and if you know you can afford your repayments as missing your repayments can cause you serious money problems. Before you start an application for a short term loan, try re-budgeting your finances for the rest of month in case you can afford to cover the costs of the expense without a loan – or even just to reduce the total amount you need to borrow.
All you need to know about short term loans
The best saving tips, budget ideas and ways to improve your financial health