Regardless of how carefully you plan your finances, it’s not always possible to know what’s around the corner. Whether you need to replace a household appliance or fix a car, a £1,000 short term loan is one way to bridge the shortfall for a few weeks.
“High-cost short-term credit” is a quick and simple but very expensive way to borrow – with interest rates typically higher and loan durations typically shorter than most other forms of credit. This kind of loan is designed to cover a temporary, unexpected shortfall in funds for a brief period. For longer-term issues, it’s definitely not the answer. If you do decide to take out a short term loan and – crucially – your application is approved, you could have the money transferred the same day. Before taking out a £1,000 payday/short term loan, you should consider alternative options. A good place to find help and advice on this is the government’s money advice service. moneyadviceservice.org.uk.
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 a very expensive method of borrowing and should only be considered as a last resort. They may not solve your money problems, and are not a good idea for borrowing over longer periods, or for sustained borrowing.
Before you apply for a short term loan, make sure you’ve considered other options. Is the expenditure that you’re planning absolutely essential? If you can defer a purchase then you could save yourself money in the long run. If you’re struggling to pay a bill, then why not talk to your electricity, gas, phone or water provider to see if you can work out a payment plan? Read more about alternatives to payday loans at moneyadviceservice.org.uk.
Wondering what the difference is between these three? Well, the first thing to remember is that these aren’t technical classifications – they’re simply terms that are widely-used (and not always in a consistent way).
When people talk about a “payday loan”, they’re generally describing a small loan that’s paid back within 1 month – on your payday. The majority of payday lenders now also offer “instalment loans”, where you can spread loan repayments across multiple instalments (normally monthly, but sometimes fortnightly or weekly). Traditional “personal loans“, which you’re more likely to find at a high street bank, allow you to borrow larger sums of money for longer periods (1 year plus).
| 30-day payday Loan from a well-known payday lender | 3-month instalment loan from a well-known payday lender | 1-year personal loan from a well-known high street bank | |
|---|---|---|---|
| Availability | Online payday loans are quick and simple, with plenty of lenders willing to focus more on affordability than credit history. £1,000 is at the top end of the loan amounts available through, and payday lenders will typically want to start with small loan amounts to prove an individual’s ability to repay. | Because spreading repayment makes for smaller, more affordable instalments, lenders may be willing to lend larger amounts if you opt for an instalment loan over a payday loan. Like a payday loan, it’s normally a quick and simple process, with plenty of lenders willing to focus more on affordability than credit history. | Personal loans are available from high-street banks, supermarkets and specialist companies. £1,000 is at the lower end of the amounts available. It can be a slower process with stricter eligibility requirements than a payday loan, but will be quicker and potentially easier if you choose a lender that you already bank with (although not necessarily the cheapest option). |
| Fixed interest rates | 0.8% per day (292% p.a.) | 267.75% p.a. | 24.9% p.a. |
| Repayments | One repayment of £1240.00 | 3 monthly repayments of £492, or 13 weekly repayments of £110.08 | 12 monthly repayments of £93.81 |
| Set-up fees | £0 | £0 | £0 |
| Total cost of borrowing | £240 | £431.04 | £125.72 |
| Can I overpay/repay early? | Yes, at any time. This will save you money in interest. | Yes, at any time. This will save you money in interest. | Yes, at any time, but you will be charged up to 58 days’ interest on the amount repaid. |
Bear in mind that these are not the only credit options available – you may wish to consider a credit card or an overdraft facility.
They additionally capped all default charges at £15 and the total cost (interest, fees) of loans at 100% of the original sum. This means you’ll never have to pay more than double the amount borrowed.
Eligibility requirements will vary from lender to lender, but expect to need to meet at least the following criteria:
CPA differs from direct debit 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 at any point by either consulting with your provider or your bank.
High-cost, short-term borrowing is intended as a short term solution and shouldn’t be used to help solve long term financial difficulties. It can provide a quick source of money to help pay for unexpected costs that crop up. At the end of the day, it’s a costly method of borrowing, therefore it’s worth considering alternative options for borrowing that may be better suited to your financial needs, such as credit builder credit cards or guarantor loans. As with any loan, you should only take it out if you’re sure you’ll be able to make the repayments.
Credio was a popular source of short-term credit online until the lender stopped issuing loans in 2018.
Looking for loans like Cashasap? Check out our list of UK lenders offering similar payday loans and services to Cashasap.
Had a payday/short-term loan application declined? Wondering why? We take you through the top reasons payday lenders say “no” plus what to do next.
If you’re experiencing a financial shortfall, you might be considering a six-month loan. Use our guide to compare loan rates and overall costs from a range of lenders, and to learn more about how short-term loans work.
Looking for sites offering similar loans to Cashfloat’s? Browse popular short-term lenders offering a comparable service. Compare rates, fees, eligibility and estimate the total cost of borrowing.
Sometimes unexpected costs pop up and leave us temporarily short of cash. If you need a helping hand for three months then you might be considering a short-term/payday loan. Use our guide to compare rates and total costs of borrowing from a range of UK lenders and to find out more about how short-term loans work.
It’s not always possible to see what costs are around the corner. If you’ve found yourself £300 short then you might be considering a payday/short-term loan. Use our guide to learn more about payday loans, to compare lenders and to calculate the cost of a £300 loan.
Need £100 to cover an unexpected shortfall? Before taking out a payday/short-term loan it’s smart to compare rates from a range of lenders. Use our fast and simple repayment calculation and learn more about short-term loans.
Why not repay your payday loan early if you can? Find lenders that let you close your loan early without charging you a penalty or fee.