A short-term loan is a loan that is offered for a short repayment cycle. What time period is meant by "short-term" can vary
greatly from lender to lender and based on the loan's purpose. A payday loan lasting one week is just as much a short-term
loan as an instalment one that lasts three months. These loans are short-term in comparison to other sorts of loans like
business loans lasting one fiscal year, or mortgage and car financing, which can last decades.
How do short-term loans work?
Applying and getting approved for a short-term loan is generally easier than applying for a long-term loan because the amounts
are often much smaller, around £100 to £1000, making for less risk on the lender's part. However, because the amounts
are too small and are generally just quick cash, there is no collateral, meaning that there is nothing backing up your loan but good
faith in you as a borrower. Should you fail to repay on time you may face negative consequences, such as fees or a lowered credit
Something else to consider is that although APR will be listed on every lender's website by law, on the short term APR isn't completely
accurate because the interest isn't being compounded over the full year. Some companies, like Sunny, remove the
difficulty of figuring this out by explaining exactly how much you'll pay in interest for hypothetical loans using an
There are many different lending companies in the UK that offer short-term loans. Choosing the one that works for you goes beyond
comparing APRs - you also need to think on all the smaller details. Will they allow you to change payment schedule as you go? Will
they charge fees upfront, or late fees? Are their interest rates fixed, or do they have a method for you to gradually lower your rates?
Do they offer instalments, or just one lump sum? By taking these questions and more into consideration before you get your short-term
loan, you can get the best deal and the loan that works best for your situation.
What makes Sunny short-term loans different?
Sunny loans 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've made your choice. Below are some important factors about our loans that we
encourage you to compare to similar short-term loans: