Finances are greatly affected when there is an emergency or unexpected expense. They go beyond our savings, and most of the time, we might consider taking out a new loan for us to get by. A revolving credit from either a line of credit or from credit card can be an option but if you have an immediate need for a certain amount of money, applying for a short-term loan can be a great idea.
What are the reasons people apply for short-term loans?
A short-term loan is different from other types and kinds of loans, in the sense that the borrower can use it for whatever purpose it may serve him or her. This loan can provide an amount of money that can be used for various purposes such as funds for investments, business or real estate purchases, immediate home and car repairs, for debt consolidation, or health emergencies.
Where can you apply for a short-term loan?
There are different financial channels that are offering short-term loans. If you are qualified you can borrow money or get an advance on your next paycheck from banks, lending companies, credit unions and even through online lenders.
Types of Short-Term Loans
- Personal Loan- This type of loan typically has lower interest rates than credit cards. It can help you make a big purchase or even consolidate high-interest debts. Application could be as fast as a few minutes only, but processing and approval can take one business week.
- Cash Advance- this type of loan that is based on an existing card is the most convenient and the quickest way to acquire a specific amount of money. This enables you to withdraw cash against your credit limit through the use of your credit card. Remember that most cash advances have a high APR and cash advance fee, so make sure to use them for emergencies. Cash advances can also be acquired from the card issuer bank.
- Payday Loan- For as long as the borrower has a regular job, this type of loan is easy to obtain. The borrower must show proof of salary through pay slips. Usually, the term for payday loan is one month and the borrower has to pay a lump sum that includes the amount borrowed plus interest.
Short-term loans are the easiest and most convenient way to acquire funds for immediate needs. You can get the money right away without too many loan requirements from a lender. There is no need for collateral or guarantors, too. This loan is easy to manage because you can pay it back quickly. The amount is relatively small, but it is a great help in times of emergencies.
Short-term loans are very popular amidst the financial crisis we are facing nowadays. This loan can be the quickest solution to some of the usual financial problems such as daily expenses for food and transportation and monthly rents or mortgages and utilities. To anybody who would apply for this loan, make sure that the money you borrow, no matter how small, should go to the most important daily needs. The small amount of money will be all worth it, if you think first of your financial goals and have an effective budget to follow
