We understand that not everybody will be accepted when applying for credit from conventional lenders. Short-term loan companies have a much higher approval rate but because of the higher risk associated, the interest rates for these products tend to be a lot higher.

Interest rates on short-term or payday loans can show an APR well into the three of four-figure mark and you could end up paying more interest in one month than a whole year on a credit card.

Lenders may also view you unfavourably if they see several short-term loans on a credit report. This is because lenders may view this as an inability to manage your money, as you are always needing to top of your finance with extra credit.

We would advise that if you want to take out a short-term loan, you only do so as a last resort and ensure that the loan is paid off within the designated period.