Frequently Asked Questions

There are some lenders who will lend to people with bad credit. However, it is important that you understand the lender’s acceptance criteria before applying for a short term loan, to prevent your credit score being negatively impacted if you apply and are rejected.

This depends on each individual lender (although there are caps on the amount of interest and fees that can be charged by lenders) and the amount you want to borrow. Interest rates are capped at 0.8% per day, or 80p for every £100 borrowed per day. The most you can pay for a high cost short term loan is capped at 100% of the amount you originally borrowed. So, if you borrowed £200, then the most you’ll ever payback for that same loan is £400 - this includes late payments. You can compare short term loans on MustCompare and use our loan calculator to see how much you'll each month and the total cost.

Responsible lending means that lenders can only lend to you if they are satisfied that you can afford to pay the money back. Lenders are therefore required to make the necessary checks - these include credit checks and affordability checks - to ensure their customers can pay back a loan.

The document request for your business to be approved will vary and include business bank statements, revenue statements, business tax returns and business plans. They will also want to view personal financial details such as personal tax returns, credit history, other investments you may have and outstanding debt.

You may also be required to stand as a guarantee or have a form of life insurance in place. An asset that you can provide as collateral may also be required should the business fail to make repayments.

Repayment term (or loan period) is the time over which you repay a loan to a lender. For example, small short term loans are usually less than one year and personal loans are generally one to five years. During your loan period you will need to make regular repayments to the lender as agreed until the end date, by which your loan balance should be paid in full.

Short term loans are often referred to as quick loans and known for their quick approval process. Normally they are quicker than larger personal loans with money often paid on the same working day, but timescales will vary depending on the lender and on your circumstance. For example, you may have a thin credit file with very little information. A lender may need to perform additional checks and may request more information, such as bank statements, proof of address or employment. These additional requests for more information and checks may delay a decision on your application.