Even if you’ve dedicated hours meticulously planning your finances, life can still throw something at you that you hadn’t bargained on – maybe you need to repair a broken down vehicle or replace a dead laptop. If you’ve found yourself in this sort of situation, a short term loan is one way to bridge the gap.
Unlike traditional “payday” loans which last up to a month, these loans are repaid over 3 months. That means smaller, more manageable repayments, but more interest overall.
3 month short term loans are a fast but very expensive way to borrow, with interest rates significantly higher than most other forms of credit. Before taking out a short term loan you should first consider alternatives such as those outlined at MoneyHelper. If you do opt for a 2 month short term loan, online applications are simple and quick, and if your application is accepted, many providers can have funds transferred to you in a matter of hours or even minutes.
Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk.
Please note: High-cost short-term credit is unsuitable for sustained borrowing over long periods and would be expensive as a means of longer-term borrowing.
Payday/short term loans are an expensive method of borrowing and are not a good idea for borrowing over longer periods, or for sustained borrowing. They may not solve your money problems.
Before applying for a payday or short term loan you should always consider other options. Is the expenditure that you’re planning absolutely essential? If possible you should defer your purchases as this will save you money in the long run. If you need the money to pay for a bill, it’s always worth speaking to your provider to see if you can organise a payment plan or defer your payment. Read more about alternatives to payday loans at MoneyHelper.
3 month loans are a high interest form of borrowing designed to help you overcome a temporary, unexpected shortage in cash.
Typically you will be expected to make 3 monthly repayments, however some lenders give the option to pay back your loan weekly or fortnightly. If you get paid weekly or fortnightly, this could come in handy. Normally the instalments are equal, give or take a penny, but some lenders (such as QuickQuid), in the first and second months only charge you the interest that has accrued, and then in the third month charge interest plus capital (the amount borrowed). That can be handy if you need a little time to get back on your feet, but it will cost you more in interest over all.
You should only take out a 3 month short term loan if you’re certain you’ll be able to meet the repayments. Failure to do could lead to your credit score being damaged and it becoming harder to secure credit in the future.
Requirements will vary by lender, but expect to be required to meet the following criteria:
A CPA is a recurring payment in which you give a company permission to withdraw money from your account on a regular basis.
CPA’s differ from direct debits because they give the company being paid the ability to withdraw money from your account whenever they wish, and to take payments of different amounts without consulting you. Most payday loan companies will use CPA to collect your repayments, however you can cancel this by either consulting with your provider or your bank.
Browse our collection of payday loan guides, designed to answer all of your short term loan questions and help you find the right payday loan.
What’s the difference between a continuous payment authority, a direct debit and a standing order?
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