What are good options for short term loans? Today we’ll answer this question in detail. It’s a fact that life can give you a lot of surprises (some of which can be welcome and some are not so pleasant).
Financial surprises where you might end up paying for damages or unplanned repairs costing hundreds or thousands of dollars belong to the latter category.
If you call your insurance company and they tell you that the damages are not covered, in that case you are faced with a dilemma – whether to cut down on some essential expenses or to take a loan to access quick cash loans.
Till you do not overestimate your capacity to borrow and apply for a reasonable sum, there are no issues with taking a loan. In fact, taking a small loan and repaying it timely only improves your credit ratings.
Small loans can be taken for short durations however, “small” and “short” both are relative terms and are highly subjective depending on the various kinds of financing and the person’s financial state.
What are good loans for the short term?
Typically, there are two types of short term loans and both have different aspect to them.
1. Cash Advance Loans – These are loans that are small in size and do not exceed $2500. The tenure to repay these loans is also limited to three months. In some cases, an extension is provided to the tenure but it is not a free thing.
Repayment for cash advance loans happens in a lump sum form only so the principle with the interest and charges will be paid on the day of payment. Needless to tell, since the amounts are small, the interest rates are higher for these loans and, depending on the loan amount the tenure does vary.
2. Instalment Loans – These loans are for those who wish the tenure to be more than three months because they are unable to pay the entire amount in one go.
When you want to pay the loan back in smaller monthly payments, you need to opt for this. These loans are much more affordable when it comes to interest rates and typically allow financing for larger amounts for up to $35,000 stretching out to 5 years or even more.
Things to keep in mind before opting for a short term loan
Borrowing money is the easiest thing to do through formal channels, online or through branches of financial institutions however, the trick is to be responsible about things and being aware of what you are getting into.
1. You need to understand that the short term loan installment might be reduced when you stretch the tenure of the loan however, the overall costs increase with longer tenures.
2. You need to compare rates being offered to you because if one lender is ready to give you a short term loans credit then other might too. You want them to compete with each other to provide you the services.
3. You can look for subprime credit card issuers for debts that you are willing to pay in weeks as you get much lower rates.
4. Always use the short term loan money responsibly. Never indulge in anything using the loans, plan your repayments and be aware of the fine print.
Watch this space for updates in the Opinion category on Running Wolf’s Rant.
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