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Looking for an alternative to short term loans?

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  • Consider a credit card instead
  • Guaranteed credit limit
  • Check your eligibility with no impact to your credit score
Check my eligibility This won't affect your credit score

Representative example: Amount of credit £1,200. Interest rate: 49.0% pa (variable) Representative 49.0% APR (variable)

What are short term loans?

A short term loan is usually a smaller value personal loan that is scheduled to be paid back within 12 months. However, the payment period can vary from lender to lender based on the amount, purpose and terms. Although dependent on the lender and your credit history, short term loans can come with a very high interest rate. This type of loan can seem appealing if there is the need to cover an emergency expense, but there are other alternatives which may work out cheaper. 

118 118 Money is not a short term loan lender, nor do we offer a payday loan. Our loans are repayable over 12 – 36 months (missed or late repayments will incur a £12 charge). If you are looking for a short term loan alternative, then you could consider one of our credit cards instead.

Apply for a credit card from 118 118 Money with confidence
Use our eligibility check to find out what credit limit we’ll offer you before you apply, without affecting your credit rating!
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Why use a credit card from 118 118 Money as an alternative to a short term loan?

Here are the reasons why you could consider a credit card from 118 118 Money as an alternative to a short term loan:

Depending on the lender, short term loans or payday loans can have higher rates of interest than our credit cards. Our credit cards are currently available at a Representative 49.0% APR (variable).

Subject to status, you could be eligible for a credit limit of up to £1,200.

You’ll get up to 51 days interest-free on purchases if you pay off your full balance each month.

As long as you have good repayment behaviour, and stay within your credit limit, you’ll have a continuous line of credit with a credit card. If used responsibly, a 118 118 Money Credit Card can help to improve your credit score.

You can increase your monthly payments to clear down your debt more quickly – with a short term or payday loan, you could be tied to fixed monthly payments over a fixed term. Although some loan providers do of course facilitate early repayments. Using a credit card as an alternative, you’ll always have to make at least the minimum monthly repayment, but it is best to keep good financial habits and repay as much of your borrowing as quickly as you are able to.

These are just a few of the reasons why a credit card from 118 118 Money may be a better solution for your short term borrowing needs, but you should always do your own research before making a decision.

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Want to apply for a credit card?

  • Alternative to a short term loan of less than 12 months
  • Check your eligibility with no impact on your credit score
Check my eligibility

How do credit cards work as an alternative to a short-term loan?

If you take out a credit card as an alternative to a short-term loan, you may be able to cover your short term loan borrowing needs by paying for things with the credit card rather than a loan.

With a credit card, you can choose to pay off your balance in full, or spread the cost of borrowing over a longer term. As long as you are making at least the minimum monthly payment you can pay off your balance in several smaller repayments, or in a larger lump sum repayment. It should be remembered however that spreading the cost of borrowing over a longer term will result in higher interest payments overall and you should always try and pay more than your minimum payments where possible.

Short term loans tend to be unsecured, meaning you aren’t required to secure your loan against an asset. A credit card shares this similarity with a loan too.

Furthermore, short term loans can be ‘no guarantor loans'. Simply put, there isn’t a need for someone to act as a guarantor if there are any defaults on payments. Though guarantor loans are available, with a credit card, there is no need for a guarantor either.

Therefore, although a loan and credit card differ in how they operate, they also share similarities too.

Can I apply for a short term loan alternative with bad credit?

Bad credit can be described as having a less than perfect credit score. Your credit score is important as this is one factor lenders will consider when you apply for credit. Generally, people with a bad credit history do have limited access to lines of credit and can be considered higher risk.

Although they are two different products, very often when searching for short term loans, you’ll likely come across payday loans. This type of loan shares many common traits with a traditional short term loan but they are different. They can both be very high interest loans aimed at those with limited or bad credit. However, they can differ on the basis of the loan duration as traditional payday loans are often repaid in full by or on the next payday.

So if you have an adverse credit history, you may be thinking ‘short term loans for bad credit’ or payday loans are the only option. However, there are other options available. Some lenders, including 118 118 Money, do consider applications from people who may have poor or limited credit history. We should clarify that we aren’t a payday lender or a bad credit short term lender, however.

If you’re considering a 118 118 Money Credit Card as an alternative to a short term loan, you can use our eligibility check option. This lets you find out if you’re likely to be accepted for a credit card without impacting your credit rating.

Choosing the right short-term borrowing solution for you

At 118 118 Money, we make borrowing money a thoughtful and transparent process.

We look at more than your credit score and understand that unexpected expenses happen – this is why we are as flexible as possible around your specific financial needs. If you are worried about your credit score, you can try our eligibility check. This means you will know your likelihood of acceptance before you apply for a credit card with us, and it won’t impact your credit score.

Our online application form, accessible on your laptop, mobile phone or tablet is very straightforward. Our eligibility check also lets you know what guaranteed credit limit we’ll offer you before you apply.

Should I consider a credit card as an alternative to a short term loan?

Before you make a loan application, you could consider a credit card instead. Credit cards as an alternative to a short term loan can be used to cover unforeseen emergencies such as a car repair bill or for unexpected bills which could leave you short on money to pay for other necessary commitments or costs.

Apply for a short term loan alternative from 118 118 Money

Looking for a loan for 3 months, 6 months or less than 12 months? Instead think about applying for a credit card with 118 118 Money? You can try our eligibility check first to see if you’ll be accepted before you apply – and it won’t affect your credit rating.

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Short Term Loan Alternative FAQs

You might find that the quick convenience of short term personal loans may also come with high interest rates. Typically these short term loans are also called payday loans.

It’s important to choose a provider that offers repayments you can definitely afford, and to fully understand all of the terms and conditions of the loan you want to apply for.

Before applying for a short term loan, you should always consider the following:

  • What APR will I be charged?
  • Are my repayments fixed amounts each month or variable?
  • Can I repay the loan wholly or in part early?
  • How quickly will I get my money deposited?
  • What alternatives are there?
  • Are there any hidden costs?

By comparing the various lenders and short term loans available to you, you’ll begin to see the impact that higher APRs and longer repayment terms have on what you can afford to borrow. Even if your monthly repayments remain fixed, the amount you can borrow will vary.

If you’ve got poor or bad credit, or no credit at all, you’ll be keen to improve your credit score. You can find options for small loans by searching the internet. Lenders will usually perform a credit check as part of the application. By making your repayments on time and avoiding making a late repayment, you could start to build your credit score.

Short term borrowing can be used for various expenses. Most often, it is used to cover an unexpected emergency such as a car repair, a small home improvement, or any other unexpected bills.

If you’re concerned about your credit history, there’s no need to panic and accept the first offer you get. It’s important to look around and compare loans. A credit card with 118 118 Money might be the ideal solution, even if you think you have bad credit, but make sure you do your research. Typically, credit card APRs are lower than the APRs on short term loans.

You can apply for the 118 118 Credit Card as an alternative to a short term loan by using our eligibility check. Using this will provide you with an indication if you’re likely to be accepted or nor. It will tell you what credit limit we’ll offer you and may be quicker to complete than a standard loan application. Should you wish to, after this you can complete a full application where a full credit search will be completed.

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Ready to apply for a credit card from 118 118 Money?

See if you’ll be accepted before you apply and find out what credit limit we will offer you without affecting your credit rating!

Check my eligibility
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