A short-term loan is a form of borrowing that is typically taken out for a short duration, often ranging from a few weeks to a few months. These loans are commonly used to cover unexpected costs, such as urgent household repairs, car expenses or temporary gaps between income and outgoings.

Short-term loans are sometimes referred to as high cost short term credit. This means they generally have higher interest rates than longer term personal loans or credit cards, reflecting the shorter repayment period and the way lenders assess risk.

These loans are not designed for long term financial needs or to support ongoing spending, and borrowing repeatedly can become expensive.

When you apply through Swift Money, we help you check whether you may be eligible for a short-term loan by matching your details with lenders on our panel.

Here’s how the process typically works:

1. Check your eligibility
   You complete a short online form. This initial check uses a soft search, which does not affect your credit score.
   
   
2. We match you with lenders
   Based on your information, we share your details with lenders who may be willing to consider your application.
   
   
3. Lender decision
   If a lender chooses to make you an offer, they will assess your application in more detail. This may include affordability checks and in some cases a hard credit search.
   
   
4. Receive your funds
   If approved and you accept a lender’s terms, funds may be paid into your bank account, sometimes on the same day, depending on the lender and the time of application.
   
   

Swift Money does not make lending decisions and cannot guarantee approval. All applications are subject to the individual lender’s criteria.

Eligibility varies between lenders, but they will typically consider:

• Your income and regular outgoings, to assess affordability
• Your credit history, including any adverse credit
• Whether you have an active UK bank account
• Your residency status in the UK

Having a poor credit history does not automatically mean you will be declined, but approval depends on your overall financial situation and the lender’s assessment.

If a lender believes a loan would be unaffordable for you, they may decline your application. This is designed to protect borrowers from taking on credit they may struggle to repay.

Short-term loans are regulated by the Financial Conduct Authority (FCA), which sets strict limits on the costs lenders can charge.

These limits include:

• Interest capped at 0.8% per day of the amount borrowed
• Default fees capped at £15
• Total cost cap of 100% of the amount borrowed (you will never repay more than double what you borrowed)

Example Cost: If you borrowed £300 for 30 days, the maximum you would repay (including interest and fees) would be £372. The exact amount depends on the lender and the terms of the loan.

Always check the full loan agreement carefully before accepting an offer, so you understand the total amount you’ll need to repay and when repayments are due.

Short-term loans can be helpful in the right circumstances, but they are not suitable for everyone.

Potential risks include:

• Missing repayments, which can lead to additional fees and affect your credit record
• Rolling over borrowing, which can become expensive over time
• Financial pressure, if repayments are not planned for carefully

If you’re unsure whether you can repay a loan on time, it may be better to explore alternatives or seek free financial advice before borrowing.

Depending on your situation, there may be other options worth considering, such as:

• An authorised overdraft from your bank
• Borrowing from a credit union
• A payment plan with the organisation you owe money to
• Support from your employer, family, or local council
• Free, independent advice from organisations such as debt charities or money guidance services

Exploring alternatives can sometimes reduce the cost of borrowing or help you avoid taking on new credit altogether.

Before applying, it’s worth asking yourself:

• Do I really need to borrow this money right now?
• Can I comfortably repay it on time without causing financial strain?
• Have I considered cheaper or non-credit alternatives?

Short-term loans are designed for occasional, short term use. Borrowing responsibly means only taking out credit when it’s affordable and appropriate for your circumstances.

If you decide a short-term loan may be suitable for you, you can check your eligibility with Swift Money using a soft search that won’t affect your credit score.

Checking your eligibility does not guarantee approval, but it can help you understand what options may be available to you before making a decision.

Swift Money Limited are authorized and regulated by the Financial Conduct Authority (FCA).
Authorization can be verified on the FCA register at: https://register.fca.org.uk/ - FCA Firm reference Number: 738569

If you are struggling with your finances and would like to speak to someone, you can contact any of the companies below, completely free of any charges:

MoneyHelper.org.uk
Nationaldebtline.org - tel: (0800 138 1111). Free, confidential debt advice service run by the Money Advice Trust.
Stepchange.org