A Guide To Making It Through The Week With Short-Term Loans
A short term loan is an ideal solution during those rough times when you’re struggling to make it from one week to the next. They offer a number of advantages compared to traditional loans, which are typically paid back over a period of years. In contrast, short term personal loansmay be repaid to the lender within only weeks or months. This makes short term loans a great source of temporary income during emergency situations.
Even with the ease and effectiveness of short term loans, it is still a good idea to completely familiarize yourself with how they work and what different types are offered.
The process may vary slightly from one lender to the next or from one type of short term loan to the next. Here are some of the standard steps you can expect to follow regardless of the lender.
You will agree to borrow a small amount from a vendor and will be expected to repay that amount with an attached interest rate.
You and the lender will reach an agreement regarding terms of repayment whether that repayment should occur at once or with a series of payments.
You and the lender will reach an agreement regarding the date on which the loan must be repaid in full by.
The lender will take the time to run a credit check and review your financial records to assess any potential risk.
If all of the previous steps have succeeded, then the lender will provide you with the loan.
Finally, you will begin the process of repaying the loan according to the schedule you agreed upon with the lender.
As mentioned, you have quite a few different options when it comes to choosing your loan type. But regardless of type, you should never agree to a loan amount if you are not positive that you can repay the amount and the interest rate before the deadline. Many lenders will be willing to spread the payments out over a period of months at the cost of an increased interest rate. This may make repayment easier, though ultimately more expensive.
Here are a few of the loan types you may encounter when shopping around.
1. The Doorstep Loan
Think of this as a loan that is delivered to your doorstep. You will complete the approval process either at the lender’s place of business, on the phone, or via their website. You work with a customer representative and traditionally must pass a credit check and financial assessment. If approved, the cash is delivered by a representative to your home in person.
2. Online Loan With Installments
This is a type of short-term loan that is very popular among people with a low credit score. It typically requires proof of income or some form of asset to secure the loan. The loan amount is often lower than other short-term loan types. What separates this loan type from others is that you are allowed to make payments on a weekly or monthly basis over a long period of time. Some of these loan periods can be as long as 12 months.
3. Loans From Credit Unions
If you have decent credit, then you’ll probably find yourself seeking acredit union loan. These organizations will vary greatly so it’s a good idea to research all of the possible options in your local area. You may be required to have a membership with the credit union. If so, the payments will be deducted from your bank account on a scheduled basis. The interest rates are generally lower than other short-term loan types.
Many of us have had those weeks where nothing seems to go as planned. Emergencies happen, vehicles stop working, and money stops flowing. A short-term loan is a great way to make it past those obstacles without slowing down. But always make sure to calculate exactly how much you can safely borrow and repay. You don’t want to find yourself sinking into debt because of one bad week.