Is a short term loan right for you?

By | August 13, 2015

Short term loans can be a huge help for many different types of circumstances. They are easy to get and many lenders don’t require any type of documentation until you are approved. The process is fast and easy and you can have the cash in your checking account the same day you apply for the loan.

Because most people apply for a small amount the terms are usually no more than 30 days they are the perfect choice for people with less than perfect credit.

Another advantage of these (often referred to as payday loans) is that you do not have to state the reason why you need the extra cash. When you apply for a short term loan the money is yours for whatever reason you need it for even if it’s to pay off a previous payday lender, which however is not recommended.

There are many benefits to payday loans, however, there are also a few drawbacks. The biggest drawback are the high interest rates. Considering the high rates over a short period  of time can make these types of loans very expensive.

To avoid the high interest rates it’s best to shop around for a payday lender that has the cheapest interest rates instead of just applying to the first lender you come across.

Payday loans were created for unexpected expenses which can occur at any time which is why it’s so easy and fast to apply for one. All you need to do is determine the amount you need and be sure to pay it back time.

Of course there are many situations where you need more time and cannot repay the loan by the due date. If this happens all you need to do is contact the lender and ask for an extension. They will extend the due date however you will be expected to pay the additional fees.

Payday loans can be a great solution to extending the family budget however be careful since you will be charged a high interest. While they can be the answer to an emergency financial situation they can also be an expensive bill that your budget may not be able to handle. However, when paid back on time not only can improve your credit score they can also make you eligible to higher limits should you even need them in the future or come across another unexpected bill or emergency. Just remember, be smart about anything you borrow and understand the exactly the amount you will be repaying.