Short term loans are often used by people who are in urgent need of money. The loans are designed to last a small period, giving you the short-term funds you need to make quick purchases, such as for household repairs. Unlike long-term or permanent loans, short-term loans come with high interest, and because it is a one time deal, you do not need to prove constant income. However, these loans come with stringent terms and often charge hefty fees for each loan.
How do Short Term Personal Loan Work?
There are two types of short-term loans. One is a secured loan where the borrower offers valuable collateral. For example, if the borrower’s car engine blows out, she can use her car as collateral for the needed money. The other form is an unsecured loan, such as a payday advance loan. With a payday advance loan, you do not give up your property as collateral for the loan, but the interest rates are very steep, and these loans come with various fees.
Advantages of Short Term Personal Loan
Short term loans are designed to help you with short-term loans. Paying an unexpected bill or buying urgently needed roof repairs. Short-term loans can be finalized quickly, so you are in and out of the loan office within a short time, meaning that you can quickly resolve your payments crisis. Since short-term loans are not long-term loans, it is not necessary to prove constant income sources.
Disadvantages of Short Term Personal Loan
Short term loans come with interest rates so high that you are better off locking in a long-term loan. If approved for a short term loan, you will be required to produce your pay stubs and proof of income. These requirements are stringent, and if you fail to provide the proper income verification, you may be denied approval for the loan.
Sources of Short Term Personal Loan for Businesses
The amount that can be borrowed from a short-term loan depends on many factors, including your credit history, income source, and the value of your collateral or if you fall into a secured or an unsecured loan. Payday loan lenders expect fast payments, so typically, the loan length will be about one to two months.
How Much Can I Borrow with a Short Term Loan?
If your past credit history is good and you are not borrowing money for your retirement or to purchase a house, you can borrow up to $1,500. The amount that you can borrow is determined by what type of loan you qualify for.
Do I Need a Guarantor to Get a Short Term Loan?
You can apply for a short term loan by either asking a family member or a friend to act as your co-signer, such as a co-worker. Your co-signer must be your age, and he or she will have to submit financial verification through pay stubs and a bank statement. Follow the link below to search for short term loans online and read customer reviews from other users who have had positive and negative experiences with short term loan lenders.
How to Apply for Short Term Personal Loan
All you have to do is fill out an online application and submit a few pieces of required documentation, and you will be ready for the loan approval process, and you can have your money in a few days. It would help if you worked on repairing any credit issues before applying with a hard money lender as your best chance of qualifying hinges on whether you have been able to improve your credit score.
List of Documents for Short Term Personal Loan
For online short term loan applications, you need to prepare the following documents:
- Picture ID Passport in case you are a non-citizen
- Proof of income such as your pay stub
- proof of residence
- your phone and/ or utility bill at hand.