Short term loans are loans and cash advances given by a lender to a borrower that have relatively short maturity date. Maturity for short term loans do not last long compared to long term loans. The loans could be due in just a couple of days, weeks or months, but not exceeding one year.
Short term loans usually involve relatively smaller amounts of money compared to long term loans. Good examples of short term loans include bank overdraft, credit cards, payday loans and cash advances. Short term loans are easier to qualify for and could either be secured or unsecured loans although they mainly usually fall under the unsecured category. Secured loans would require a form of security or collateral. Unsecured loans would not require any form of collateral or security and would come with higher interest charges as they pose more risks for the lender.
Short term loans are usually used to meet up with unexpected surges in budget or unplanned expenditure. Short loans are thus easier and quicker to access to enable the borrower use it for the desired purpose. There are different types of short term loans with different perceived advantages or disadvantages. Before taking out any form of loan, it is important to first properly understand the loan and shop for reputable short term loan lenders offering the best rates.