The world is full of uncertainty and nobody can really tell when an emergency is about to strike. This makes it difficult for people to cater for their daily to day expenses and at the same time pay for emergencies. This is the reason why short term loans are popular among US residents.
When an emergency arises, there are different options that you might consider depending on the situation at hand and the available source of income. The common types of emergencies that most people experience include unexpected car repairs, medical bills, home renovation or when an important home appliance fails to work. In such cases, short term loans can be of great benefit.
One benefit of short term loans is that you can apply regardless of how bad your credit score is. They offer an option for people with bad credit to get short term funding. Short term loans have a term of two to four weeks.
Getting access to a short term form of funding, like a payday loan, for instance, is the easiest and hassle-free way of getting quick cash. The process involves filling a simple and straightforward online loan application form. There are no hard credit checks. At times, you may be required to directly communicate with a potential lender.
The quick and simple nature of applying for short term loans makes them very popular among the working class in the United States. You don’t have to visit the bank every time you need a small amount of money for emergencies.
Most lenders offer short term loans of between $200 and $1500. At times, this amount can be as high as $3000 if you meet other income requirements. Thanks to the minimal requirements when applying for short term loans, the interest rate is usually higher compared to bank loans. So if you need a loan amount of more than 1500, it is advised that you consider other affordable options like installment loans which have a lower interest rate.
When applying for short term funding like payday loans, you should be prepared to pay more. For one, the lenders put themselves at risk when offering the loan since no collateral is required. This increase in risk will affect the amount that you can qualify for as well as the interest rate and fees.
Loans have varied interest rates and terms. This depends on the lender who issues the loans, and how much money you can qualify for. Other factors that can affect the loan amount and interest rate include your income, credit score and whether you have a bad credit history.
Even before committing yourself to the loan, ensure that you pay attention to the terms and conditions. Make sure that the terms are transparent with no hidden charges. If you have any questions, ensure that you get clarifications before signing the contract. Remember that you are also allowed to cancel the contract without being charged any fees. But this can only happen within 48 hours after signing. However, this rule may vary from one state to another.
The high-interest rate aside, there are many reasons why you should apply for short term loans. These include the following;
Once you get approved for a short term loan, the lender will deposit the funds to your bank account. It can only take a few hours to apply and get approved for the loan. Thus can be handy when you have a financial crisis since they offer mediate financial assistance.