What are short term loans?

3 Minutes Read

Short term loans are loans that are repaid in a short period of time hence, the name “short term loans”. This loan option is available both to individuals as well as businesses. For an individual the payday loan can be obtained at any time of the month when one needs instant cash. This type of loan does not require that one has a good credit score to qualify. The eligibility requirements are as follows:

  1. Must be aged 18 years and above.
  2. Have a steady employment and income for the past 6 months.
  3. Have a checking account.

Sometimes, we are suddenly faced with some emergencies that require cash when the payday is still far away. This sort of emergency can happen at any point of our lives. While it might be a good idea to get a loan to solve this situation, the intricacies and formality of the loan approval takes time. Besides, it is unwise to go for a large loan when all that is required is a little cash to clear some unforeseen bills.

At times like this, the short term loan can be a life saver. This loan does not require any paper work and can be obtain within 24 hours from when a person applies for it. It is also possible to make the application online – this means you do not have to leave your home or office to get it approved. However, there are some things that should be put into consideration when opting for these short term loans. These include:

1. How reliable is the lender? There are a lot of lenders out there offering short term loans. It is important that you choose one that is reliable and can be trusted. One way to determine the reliability of the lender is by checking the feedback and reviews of the lender.

2. What is the cost implication? Ensure that you check all the fees and confirm that there are no hidden charges. Clarify the exact time you are expected to pay back the loan and how much you will be paying.

3. Early repayment of the loan? You should confirm from the lender if you can pay back the loan earlier than the agreed date and what benefits you stand to get if you do. Although, there are likely no benefits, it will do you no harm to know.

Short term loans can be a live saver in emergency situations, but they should not be abused. Do not take these loans expect you actually need it.