Short term loans are essentially cash advances that are given to people in times of immediate need of cash and that is one of the main reasons why these loans are becoming increasingly popular.

1. Short Term Loans

2. Short term loans are essentially cash advances
that are given to people in times of immediate
need of cash and that is one of the main reasons
why these loans are becoming increasingly
popular. There are different purposes for a short
term loan and the number of applications has
increased in the last few decades. The financial
uncertainty has added to the problems that the
people are facing today and as a result of that, it
has increased their dependence on financial
institutions.

3. Long term loans are not affordable for many and
many people belonging to the lower classes of
society do not have access to these lines of credit.
These short term loans are now finding their
importance amongst college students applying for
scholarships, people paying for their mortgage,
covering business needs and many others.

4. Let us discuss some of the important purposes
that short term loans can be used for:
Short term loans for students are primarily used
for students who have cash flow problems due
to unexpected situations that may arise. In order
to apply for short term loans, a student must
understand the terms and conditions before
applying for one.

6. Short term Loans for College Students:
• Short term loans for college students have a
limit of upto 500 pounds. There are certain
students who want to receive cash-in-hand
usually have a limit of upto 100 pounds. A higher
amount is usually paid via cheque or direct
deposit.
• Students must be admitted to a degree program,
utilizing 6 credit hours as an undergraduate
student and 5 hours as a graduate student,
during the term of the application.

7. • If the application for financial aid has not been
completed, the student must have verifiable
employment or co-signed with another employer to
ensure repayment of the loan, once the term has
expired.
• Short term loans for educational fees are usually not
allowed.
• No short term loans will be given against expected
financial aid by a student. The financial aid needs to be
completely approved by the authorities in order to
make the student eligible for the loan.
• Students are always allowed 2 short term loans per
semester and this is mainly because students shouldn’t
find themselves into the habit of borrowing money.

8. Short term Loans for mortgage properties (bridging
loans):
• The bridging loans market has grown steadily in the
recent years, as borrowers try to complete their
property purchases to secure their dream house.
• Borrowers usually pay a high price for bridging loans
with arrangement fees of one per cent in addition to
one per cent per month.
• This could mean 10000 pounds in fees and interest in
just the first month. The bridging loan could be for as
short a period as 2 months, it could rack up 20,000
pounds.

10. • There are different ways of deferring payments
and especially when your home is at stake, you
could sell your home, pay off the mortgage on
your existing home and cover the debt of the
future home by applying for a loan with a
smaller interest fees.
• They are an expensive source of finance and
the Financial Conduct Authority has expressed
these loans as one of the last resorts for
borrowers.

11. Short term Loans for Small Businesses:
• Short term loans are helpful to businesses, especially
retail businesses that are seasonal in nature. Such a
business need a short term loan usually during the
holiday season, and this loan is repaid at the end of the
holiday season.
• Other uses for short term funds are to increase the
working capital so that you are able to meet your
business needs. This is because it is important for you
to have enough capital for your payrolls, for paying
your bills and so on.

12. • The interest rates on short term loans are
usually higher than long term loans but in
recessionary times, the interest rate can be
lower. Short term loan rates are usually based
on the prime interest rate plus premium.

14. • Start-ups find short term loans a more feasible option
than long term loans and this is mainly because they
are considered less risky than long term loans. Start-up
firms have to present extensive documentation to the
lender such as the project cash flow statements for the
next 3-5 years along with the anticipated financial
statements for the time period of the loan.
• It is essential to understand that small businesses find it
extremely difficult to operate without short term loans
and this is needed for an economy to operate
smoothly; as start-ups are always strapped for cash and
do not always have money.

15. In order to qualify for a short term loan, it is essential to
present comprehensive documentation to the lender
whether it is a bank, a credit union or another financial
institution. It is natural for a lender to ask for your earlier
loan repayment history, as it builds confidence in the
lender and also gives him an idea of how quick you are
about your repayments. A lender also considers your
business’s functioning and how regular you have been
about your payment of bills, payment to suppliers, and
payment to employees.

16. All these factors contribute to whether you can
get the loan or not. Businesses have found short
term loans to be an excellent source of finance
and have found these loans to be a blessing
during season times, when they require the extra
cash to finance their immediate needs.

18. In conclusion, short terms are considered more
of a blessing than a curse in difficult times and
are being considered by people belonging to
different walks of life. Short term loans have
been seen as an opportunity by many financial
institutions to bridge the gap between the lender
and the borrower, bringing short term finance to
many borrowers is an ideal opportunity to keep
the economy in check, as it reduces the debt
cycle.

19. The scrutiny of applications also needs to
continue, as it leaves no room for fraudulent
practices adopted by either side. All in all, short
term loans are here to stay.

20. For more information go here:
www.trueblueloans.co.uk

21. Thank You