**Warning:** Late repayment can cause you serious money problems. For help moneyhelper.org.uk | **Representative APR: 79%** | The Money Shop is a trading name of New Horizons Finance Limited who is an introducer appointed representative of Flux Funding Limited, who are an authorised credit broker, not a lender.
**Warning:** Late repayment can cause you serious money problems. For help moneyhelper.org.uk

3-Month Payday Loans.

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3-month payday loans

When you are struggling for cash or need funds quickly for an emergency or unexpected expense, you might consider short-term finance options. Payday loans are a popular choice for those in need of some cash before their next pay date. For slightly longer-term lending or the ability to pay off in instalments, three-month payday loans are a reasonable option.

Anyone who is considering taking out a three-month loan should be aware of everything involved, from how the money is paid to what and when you need to make repayments. We’re sharing everything you need to know about three-month loans.

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What are 3-month payday loans?

Three-month payday loans are short instalment loans that are settled in three monthly repayments. This differs from most payday loans paid off in one instalment, usually within 30 days of borrowing. As with all short-term lending, three-month loans can have high interest rates, making them an expensive option. This type of borrowing is perfect if you need access to cash quickly but cannot pay the full amount back in one lump sum. You can spread out the repayments over a few months, making them easier to pay back.

How much can I borrow?

The majority of three-month payday loan lenders will offer between £100 and £1,000, depending on your credit score and eligibility. If you need to borrow more than £1,000, a payday loan might not be the best choice for you. In this guide, we share everything you need to know about short-term loans, including eligibility, alternatives and more.

Your questions, answered

All three-month payday loan lenders will have criteria that borrowers must meet to be eligible for finance. These criteria can vary between payday loan lenders, but ultimately, every loan provider has to help protect you from financial trouble. It is important to remember that lenders don’t put eligibility criteria to discriminate or catch borrowers out. These measures are in place to protect borrowers and ensure you can afford to make the repayments

The Financial Conduct Authority, or FCA, has rules for eligibility for all lenders. Every lender will have slightly different criteria in place. Typically, for short-term loans, borrowers must:

  • Be over 18: Most short-term loan providers will not offer finance to anyone under 18. This is to make sure that borrowers can make an informed decision and are responsible for their own financial situation.
  • Be employed: When applying for a three-month payday loan, you should be in a position to pay back the loan amount, plus interest. This means that lenders will only offer finance to those with a stable income from either full or part-time employment.
  • Be a resident in the UK: Most UK lenders will only provide credit to UK residents and check details against the credit reference agencies or CRAs. As a borrower, the best way to ensure these checks go smoothly is to ensure you are on the electoral roll.
  • Have a UK bank account: You will need to have a UK bank account and a debit card to apply for a short-term loan. This is because the funds are transferred directly into a bank account, and repayments are taken automatically from the account via direct debit.
  • Have an email and mobile number: Contact details, including mobile number and email address, are required when applying for a short-term loan. They are used to verify the application and the lender to contact you about your loan.

This is just a basic checklist that all borrowers must meet, but a credit search and affordability assessment will also impact the decision. For a three-month payday loan, lenders will look at your current debt, income and outgoings to ensure you can pay off the loan amount, plus interest. Many things can affect your eligibility for a short-term loan, and meeting the criteria set out is just the first step.

There are many different types of short-term loans. Payday loans are designed specifically to tide you over until your next pay date, whereas instalment loans last longer. Three-month payday loans allow you to pay the loan back in three smaller monthly instalments. When you apply and approved for a short-term loan, the loan amount is deposited into your bank account the same day. The lender will then take the repayments on the agreed dates directly you’re your bank account. Loan providers may also allow you to pay back early if you want to.

The Financial Conduct Authority has capped payday loan costs, so there are limits on the amount of interest and default fees you could be charged. Interest rates vary greatly between lenders, but the caps mean that you will never have to pay back more than twice what you borrowed. Short-term loans are notorious for having high interest rates, and some APRs go as high as 1,500%. If you are taking out a three-month loan, be sure to shop around and do your research to find the best deal.

Choosing the right lender for a short-term loan is critical. Payday loan scams are a common problem, and a bit of research can help you spot the warning signs that a company isn’t legitimate. Not only that but taking time to choose the right lender can help you find the best interest rates and repayment terms. When looking for a short-term loan, check all the charges involved. This includes interest rates, default charges and if the lender charges anything for early repayment. You should also check that any lenders you are considering are registered with the FCA, ensuring they are operating legally. It is worth looking at reviews online from previous borrowers to understand how well the loan provider treats its customers.

Three-month payday loans are not the only option out there when it comes to short-term finance. If you need cash quickly, they can be a tempting option, but sometimes these alternatives might be cheaper:

  • Credit card: Many credit cards offer 0% finance promotions for the first 3 to 6 months, and some offer 0% finance forever as long as you pay it off in full every month. Unlike a short-term loan, you won’t be able to get cash from a credit card unless you pay for a cash advance. However, credit cards will always have a lower interest rate than three-month payday loans.
  • Credit unions: Credit unions are community loan providers. They are often small non-profit organisations that help local communities. More than 300 credit unions in the UK often work out much cheaper than short-term loans from payday lenders. Credit unions have a cap on the amount of interest they can charge, and currently, this is 3%, which is far less than payday loan rates.
  • Overdrafts: The majority of banks will provide the option to add an authorised overdraft to your account. They will still charge some interest, but they are often cheaper than three-month payday loans if you stay within your authorised limit. Always avoid unauthorised overdrafts because they can come with additional charges, making them difficult to get out of.

At The Money Shop, we can help you access short-term loans to help you handle unexpected expenses. Whether your car has broken down or your house needs repairs, a short-term loan could help you get back on your feet. Our broker partner’s panel of lenders offer three-month loans, which are paid back in three monthly instalments. The APR and amount you can borrow will depend on your individual circumstances.

If a short-term loan isn’t the right choice for you, but you still need financial assistance, get in touch with our knowledgeable staff. We can help you understand the alternatives available to you and make the right choice for your unique situation.