Short-Term Lending Options Explained

If you need money now and you know that you’ll be able to repay the loan in full in the near future, you may want to consider short-term loans. These types of loans are typically easier to get than regular loans because they’re usually for a smaller amount. When it comes to short-term borrowing, some people even opt to take out more than one type of loan at the same time. Consider these types of short-term loans if you’re in need of money fast.

Installment Loans

When you get an installment loan through your bank, you’ll be loaned a set amount of money on a short-term basis. You’ll have to make regular payments, which include interest, until the loan is repaid in full. You’ll have to set up automatic deductions from your bank account, which means the money will automatically be transferred to the loan on a set schedule. Installment loans can be used to pay for large items, like a home or car.

Personal Loans

Personal loans are available to most people regardless of their income level. You may want to take out personal loans online so that you can finish a home renovation project, make a major purchase (like a car), or cover an emergency expense. Personal loans are unsecured, meaning they’re not backed by any type of collateral. Your credit standing will affect how much you’re approved for or whether or not you’re approved at all.

Payday Loans

A payday loan is a short-term loan that’s directly deposited into your bank account. It’s an option for people who are struggling financially until their next paycheck comes in. The idea is that the loan is repaid in full when your next payday arrives. You’ll have to pay high interest on this type of loan, especially if you don’t pay it on the predetermined date. You may need to show records of employment and your recent pay stubs in order to qualify for this type of loan.

Title Loans

A title loan is a high-interest, secured loan that you’ll need to use your car as collateral for. The loan amount is based on the car’s equity. If you’re not able to make your payments, the loan company will be allowed to repossess your car, which is the main reason why taking out this type of loan is very tricky, especially if you’re not entirely sure you’ll be able to repay it on time. Often, the loan company will require that a GPS system is installed in the car so that it can be easily found if it needs to be repossessed.
Taking out any type of loan is going to cost you money, whether or not you have a good credit score. Loans come with interest rates and fees, and it’s always better to only purchase items that you can afford with the cash you have on hand. However, when you’re in desperate need of money now, short-term loans can offer much-needed relief. Also note that if you have multiple short-term loans out at the same time, you may want to consider loan consolidation so that you only have to pay one fee per month instead of several.