Finance Glossary

Short-Term Loan

A loan with a repayment term typically ranging from one month to twelve months. Short-term loans in the UK are subject to FCA regulation and, if classified as high-cost short-term credit, are subject to the FCA cost cap. They are often used to cover unexpected expenses, emergency costs, or cash flow gaps and are available to borrowers with a range of credit profiles.

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Related terms

Payday Loan
A short-term, high-cost loan typically designed to bridge th
Instalment Loan
A loan repaid in regular, fixed instalments (usually monthly
FCA Cost Cap
Rules introduced by the Financial Conduct Authority in Janua
APR
Annual Percentage Rate — the true annual cost of borrowing,
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