Payday loans are designed as monthly loans to cover you until your next payday. Short term loans (or short term cash loans) can also be addressed as payday loans since they too can be taken out until your next payday over the complete month, but there is greater flexibility available here. The innovation here was crafted by Wonga who allowed each customer to choose the specific day to pay back the loan (for example an 8 day loan term). The only other payday lender here in the UK that offers these same flexible terms is SafeLoans; should any new lenders arise with flexible terms then they will be referenced here. Other than Wonga and SafeLoans, the third payday lender that counts as a short term loan lender is TxtLoan. They don’t allow you to choose the specific loan term, but they do have a set 15 day loan term. And so, with each three of these lenders you could take out a loan for 15 days that wouldn’t be available via the monthly payday lenders such as QuickQuid.

The ruling here is to count any lender as a short term loan lender if they allow each customer to borrow cash for a 15 day term or less. The general point behind a reduced loan term is that less interest will be required to be paid and many of us of course won’t need a loan for a full month. With Wonga we could perhaps just borrow cash over the weekend, which may be the only time that we require it for. Just to add that if a payday loan lender offers the monthly loan term, but allows early repayments then this doesn’t count (regardless of if the interest is knocked off). The noted short term loan lenders can be used as monthly payday loans, but they are generally designed for those much shorter periods, which is reflected in the overall charges that mount up over that full 30 day term. Just to add that one limitation with SafeLoans is that their fast transfers are on the expensive side, but they are otherwise a great lender (I have been highly impressed with their recent upgrades).

(tags: cash advance, loans for a week, loans that you pick the day, short term loan lenders uk, wongaloan)