What is a short term loan?
A short term loan is a personal loan you repay over a short period, usually somewhere between 3 and 12 months. Through Dot Dot Loans you can apply to borrow from £100 to £5,000, and choosing a shorter term simply means clearing the balance more quickly.
Because the loan is settled sooner, less interest builds up overall, though each monthly payment is larger than it would be over a longer term. Short term loans suit a cost you expect to clear before long, rather than a large sum you want to spread out.
How short term loans work
The mechanics are simple. You borrow a set amount, agree a term, and repay in equal monthly instalments that include both interest and part of the original balance. The payment is the same every month, so you always know what is due.
You apply online, and if you go ahead the lender pays the money into your bank account, often the same day. From there you repay on the agreed dates until the balance reaches zero.
What short term loans cost
The table below shows illustrative repayments at our representative rate over short terms. It is a guide only, and your own rate depends on the lender and your circumstances.
For loans that count as high cost short term credit, the Financial Conduct Authority limits the cost:
Short term versus long term
The right choice comes down to what you can afford each month against what you want to pay in total:
Clear the balance quickly.
Spread the cost further.
When a short term loan makes sense
A short term loan tends to fit when you want to borrow a modest amount and clear it quickly, and when the higher monthly payment fits comfortably in your budget. Common examples include covering an unexpected bill, a car repair, or bridging a short gap you know you can close soon.
If the monthly payment on a short term would stretch you, a longer term with smaller payments may be safer, even though it costs a little more overall.
Applying for a short term loan
You can get a quote in about two minutes. We check our panel with a soft search, so you can see what you could be offered without any mark on your credit file.
Borrowing responsibly
Only borrow what you need and can comfortably repay. Look at the total amount repayable over the whole term, not just the monthly figure, and leave yourself a buffer in case your outgoings rise.
If money is already tight, free and impartial help is available from MoneyHelper before you take on new borrowing.
Sources and methodology
Every figure in this guide is drawn from an official or independent authority, listed below. We do not link to other lenders or brokers. Where a statistic could change, we note when we last checked it, in July 2026.
Methodology: this guide is written and reviewed in house by Paul Gillooly, Director of Dot Dot Loans, using published rules from the Financial Conduct Authority and figures from the sources above. It is general information, not financial advice. Representative Example: £1,000 borrowed for 18 months. 17 monthly repayments at £87.22, final repayment of £87.70. Total amount repayable £1,570.44. Interest total £570.44. Annual interest rate 59.97% (fixed). Representative APR 79.5% (Variable). Any representative monthly repayment shown is for illustration only, based on our representative APR. Your actual repayments will be confirmed by the matching lender if your application is approved.