Borrowing a small amount of money can feel like a low risk decision, especially when the expense seems manageable, However, even small loans should be taken seriously and only used when they’re affordable and necessary.
This page is designed to help you understand when a small short term loan might make sense, what to consider before borrowing and what alternatives may be available so that you can make an informed decision rather than a rushed one.
Swift Money is a UK-based credit broker, not a lender. We help you check your eligibility for short-term borrowing options using a soft search that won’t affect your credit score. We don’t charge borrowers a fee for using our service.
When to consider a small loan
Small loans are typically considered for short-term one-off costs, such as:
- Replacing or repairing essential household items
- Covering travel or car-related expenses
- Bridging a temporary gap between income and outgoings
They’re not designed for ongoing expenses or to support regular spending. If borrowing becomes frequent, it’s often a sign that another solution may be more appropriate.
"It's only a small amount" - Is that always true
Borrowing less money does not automatically mean borrowing is cheaper or risk-free.
- Interest and fees still apply
- Repayments still need to be made on time
- Missed payments can still affect your credit record
The key consideration is not the size of the loan, but whether repayments are manageable and within your budget.
What lenders look at for small loans
Lenders assess small loan applications in much the same way as larger ones, focusing on affordability rather than loan size.
- Your regular income
- Essential living costs
- Existing financial commitments
A smaller loan does not guarantee approval. If a lender believes repayment would cause financial strain, they may still decline the application.
How Swift Money fits into the process
Rather than applying directly to a single lender, Swift Money helps match your details with many UK FCA authorised and regulated lenders
who may be willing to consider your application.
- You complete a short eligibility check using a soft search
- Your details are shared with lenders on our panel
- Lenders decide whether to proceed with further checks
- If approved and you accept an offer, funds can be paid to your bank account the same day
Swift Money does not make lending decisions and cannot influence the outcome of your application.
What does a small loan actually cost
Small loans are classed as high-cost short-term credit and are regulated by the Financial Conduct Authority (FCA).
This means there are limits on what lenders can charge:
- Interest capped at 0.8% per day
- Default fees capped at £15
- A total repayment cap of 100% of the amount borrowed
Example - Borrowing £100 for 30 days would mean a maximum repayment of £124, including interest and fees.
The exact cost depends on the lender and loan terms.
When a small loan may not be the best option
You may want to pause or look at alternatives if:
- Repayments would cause stress or financial pressure
- You’re relying on short-term borrowing regularly
- The expense can be delayed or reduced
Exploring other options first can sometimes prevent problems later.
Alternatives worth considering
- An authorised bank overdraft
- Spreading a cost with a retailer payment plan
- Borrowing from a credit union
- Support from family, friends, or local authorities
- Free advice from money or debt support organisations
A quick self check before borrowing
- Do I really need to borrow this amount now?
- Can I repay it comfortably without affecting essentials?
- Have I explored other options first?
Taking a moment to consider these questions can help you decide whether borrowing is the right step.
Check your Eligibility
If you choose to explore small loan options, 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
before deciding whether to proceed.
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FCA register
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
Free financial Advice
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
