Loans can be complicated, and lenders often add to the confusion with financial jargon that is difficult to understand. To avoid hidden surprises, it helps to understand everything there is to know about the loan you are considering. Here, we’ve covered what short-term personal loans are, why you might choose one, their advantages and disadvantages, and Sunny’s short-term loans.
What are short term loans?
A ‘short-term loan’ is as its name suggests: it’s a loan with a relatively short repayment period. This can range from around as little as a week to a number of months depending on the lender and their policies. This is considered short-term when compared to traditional personal loans which usually have a repayment period of a year or longer.
Because the time frame of short term loans is considerably less than other types of loan, the amounts lent are typically quite small, generally ranging from £100 to £1000, to help borrowers quickly get out of a temporary financial tight spot, as well as posing less risk to the lender.
Why would you choose a short-term loan?
Short-term loans can help borrowers with emergency expenses that suddenly arise. For example, if you need to urgently repair your car, or fix a broken boiler and do not currently have the money to cover it, a short-term loan could be a helpful solution. The short time frame of the loan allows you to pay it back when you have more money, without committing to a long-term contract.
What are the features of a short-term loan?
A short-term loan is handy because it’s so straightforward to apply for and it’s often easier to get approved for than a long-term loan. Short-term loans for those with poor credit, in particular, are also generally easier to obtain than a long-term loan. Depending on your lender, a short-term loan won’t require much paperwork and the money arrives in your account the same day, to help you get out of any pressing financial struggles.
On the other hand, because the amount borrowed with a short-term loan is usually small and to be repaid quickly, often in one go, there is added risk to the lenders who provide them. As with any type of credit agreement, if you don’t make your repayments on time it could affect your credit score. With some short term loans, you could be faced with late repayment fees by certain lenders if you fall behind on repayments.
Sunny’s short-term loans
At Sunny, we offer short-term loan options. The amount we offer ranges from £100 to £2500, over terms between six and 14 months. Our short-term loans are completely flexible, and you can pay more each month if you wish, or repay the whole sum early to save money on interest.
Our interest is charged daily and is capped at a maximum of 0.8% per day. On top of that, if you decide you’ve changed your mind, you can cancel your loan within 5 days of taking it out and repay only the principal amount with no fees or interest.
Why choose Sunny?
At Sunny, we offer one of the most flexible emergency financial solutions in the UK. As well as our flexibility, Sunny is different from some other loan companies because we have no extra fees guaranteed. This means that we don’t charge fees for late repayments, application fees or administration fees, so all you have to pay back is the original loan amount, plus interest.
We operate with simplicity, honesty, and transparency. We make everything, including the fine print, easy to understand by giving you all the details you need upfront, before you apply. We aim to help you every step of the way, so even if you are struggling to make your repayments, we work with you through any financial struggles and provide a lifeline in your time of need.
How to apply for a short-term loan
Applying for a short-term loan with Sunny is quick and easy. You apply online by providing us with your personal details, such as your name and date of birth, your address, and your bank and employment details. We will then carry out a quick but thorough credit check. The credit check we carry out is in place for the applicant’s security, to ensure we aren’t lending someone more than they can comfortably afford to repay.
Your credit score is a summary of your financial history and is made up of information such as court records, electoral roll information, details of other lenders that have searched your file, addresses you’re linked to, bank accounts, loans, mortgages, utilities and mobile phone contracts. Even if some of your history is unfavourable and you have a poor credit score, our short-term loans could still be an option for some borrowers.
You will receive a decision on your application quickly and if approved, the money you borrow will be sent to your bank in as little as 15 minutes so you can solve emergency expenses without delay.
As with any loan, it’s important to research what you’re getting into thoroughly before making an application. Most importantly, never borrow more money than you aren’t fully confident you’ll be able to pay back. To avoid financial difficulty and debt building up, try to avoid taking out loans on a regular basis – borrowing money should be considered only when completely necessary.
For more financial information, and tips on how to get the most out of your money, check out our Digital Magazine – Good Vibes. If you have any additional questions regarding our short-term loans or the application process, please visit our Frequently Asked Questions. Alternatively, you can contact us using our online live chat, Facebook, Twitter or email and we’ll be happy to help.