poor credit loans

How to Find the Best Short-Term Loans?

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Unprecedented emergencies can bowl us over in no time. Even if you’re a pro at financial planning, unplanned expenses such as repair works, plumbing or medical bills can shake your budget.

We often emphasize the importance of financial resilience strategies and emergency funds. But how many of us have adequate funding? In such situations, if an emergency strikes out of nowhere, it can quickly shake your financial balance.

Tapping into your savings to cover small expenses may not be a wise financial move. A short-term loan could help you cover such costs. You can then pay off your loan through affordable monthly instalments over a fixed period. But are short-term loans a good choice for people with a low credit rating? Let’s find out!

In this article, we’ll gain better insight into short-term loans for bad credit. Is it safe to borrow a short-term payday loan in the UK? Read on to know.

What are short term loans?

Short-term loans are a form of high-cost short-term credit. They are essentially personal loans that help you cater to more minor but unforeseen expenses. The typical loan term for short-term loans is less than 12 months.

Short-term loans usually have a higher interest rate than a typical personal loan. How high these rates get depends on your credit score. Your credit score is pivotal to your application. Lenders check your credit score to assess the risk that you pose to them as a borrower. The lower the score, the higher is the risk proposition. Therefore, lenders set higher interest rates on loans for people with a below average credit rating.

On the contrary, decent credit history can get you offers with competitive interest rates and better loan terms. If you happen to secure a short-term loan with a bad credit score, you can use it as an opportunity to improve your credit score.

Lenders report your repayments to credit bureaus regularly. Each timely repayment contributes to building your credit score. However, missed repayments can damage your credit score. If you miss a series of repayments, the lender may even get a County Court Judgment issued against you. A CCJ stays on your credit report for 6 years as a negative item, hampering your chances of securing credit. This could gravely impact your financial milestones and life goals. Thus, it is crucial to ensure timely repayments for your short-term loan.

Since people usually borrow smaller amounts for short-term loans, the payouts are swift. Lenders usually transfer the money to your bank account through wire transfer. Sometimes, it might just be a matter of hours before you get the money.

Can I borrow short term loans – bad credit?

You can apply for a short-term loan even with bad credit. However, you may not be able to qualify for low-interest loans and competitive terms. So, if you urgently need some money but have bad credit, Oyster Loans can help you find suitable short-term loans.

Oyster Loans is an FCA approved loan broker in the UK. Our panel of FCA approved lenders have a variety of loan offers, even for bad credit applicants. Compare multiple offers to find your ideal loan with Oyster Loans.

Is short term loan ‘no credit check’ a myth?

The term ‘no credit check’ is an advertising gimmick to lure customers with bad credit. Most people with a low credit score either:

  • Want to avoid the damage that individual hard credit enquiries cause to their credit score.
  • Want to avoid a credit check as they fear that lenders may deny a loan upon a formal credit check.

All lenders, even those who advertise no credit check loans, run a hard formal enquiry into the borrower’s credit profile. The only difference is that no credit check lenders don’t form their lending decision based on your credit score.

No credit check lenders may lend you money despite a low credit rating. However, these loans can be tricky to deal with since there is no gauge of the borrower’s repayment capability. Besides, the interest rates for no credit check loans can be higher than that of a typical short-term loan. Therefore, it is essential to weigh the pros and cons of your credit options to make an informed financial decision.

Is it safe to borrow short-term payday loans?

Payday loans are a form of high-cost short-term credit that you can borrow as a cash advance to cover unplanned expenses. You can usually pay off a payday loan within a week or a month. The interest rates for payday loans are excessively high, with average APRs exceeding 400%.

Payday loans were formerly not under FCA’s regulation. But after the rampant rise in their popularity and, consequently, in consumer complaints, the FCA decided to intervene. Payday loans now have a price cap on their interest rates and additional charges to safeguard the borrowers’ interest.

For every £100 borrowed, the lender cannot charge more than £24 for a 30-day loan. If you happen to miss a payment or fail to keep up with your repayment schedule, the maximum penalty that a lender can impose is £15 plus the interest on the amount borrowed. The price cap also ascertains that you don’t end up paying more than twice you’re the borrowed amount to your payday lender.

Tips for finding the best short term loans

Here are some tips to help you find a suitable short-term loan:

  • Check the lender’s requirements
  • Check the loan amount that you can borrow with this lender
  • Check the FCA’s Financial Services Register to see if you’re dealing with a legitimate lender.
  • Regularly check your credit report.
  • Borrow an amount that you can afford to repay.
  • Find out how long this lender usually takes to process applications.
  • If you need a loan urgently, check the speed of disbursal.
  • Space out your applications to prevent credit score damage.
  • Set a manageable repayment schedule with the lender.
  • If possible, use the direct debit facility to ensure timely payments on your monthly instalments.
  • Check for hidden charges in your loan agreement.


Short-term loans are a quick solution to an unprecedented cash crunch, albeit at high-interest rates. Like any other credit solution, you should handle your short-term loan responsibly and make timely repayments to avoid a credit score drop.

Oyster Loans is an FCA-licensed loan broker in the UK that can help you find your ideal short-term loan. With a panel of some of the UK’s leading FCA-authorised lenders, Oyster Loans can help you find a suitable loan offer, even with poor credit. Fill a quick online application form and compare multiple offers to find your ideal short-term loan.