When you want a quick fund to take care of bills, start a business or take care of a financial emergency, short term can come in handy. They are accessible to almost anyone as long as you identification and income proof
Below are some of the benefits of taking up a short term loan
Most lenders offer their short term loans with minimal interest imposed. Since the time required to pay the loan is minimal, you are guaranteed that you will not repay the interest rates in excess. The interest rates are set according to the period of repayment. This means when they payments are late, the lender adds more interest to the outstanding loan amount. The charges you incur will only be for a short while, until you complete the loan repayments.
You can commit to the payments
Since the interest rates are low, you can easily commit part of your monthly income in repaying the loan. Short term loans are easy to calculate and incorporate into your monthly commitments. Some short term loans can take up to 30 days to repay. Long term loans can take a toll on your income and savings in general.
It can be good for your credit
Taking short term loans is an easy way to improve your credit score fast. Ensure you do not have any credits or outstanding bills when you are taking short term loans. This is how it works, when you take a short term loan and make the payments on time, it reflects on your credit report as a score. Imagine taking short term loans consecutively and making sure you complete the payments on time. You will gain a lot of point on your credit history.
Unlike applying for a long-term loan, you do not need so many legal documents. Lenders require a National identification card or licence o prove you are a citizen and a bank account where they can carry out the transactions. Some lenders who offer larger loan amounts may need proof of income and employers contact o make sure you can pay the loan back in time.
Approval is fast
Short term loans do not take a long time to process. They are quite fast when compared to long term approval rates. For some short term loans, you do not need to visit the physical address of the lender to get an approval on your loan. You can easily apply the loan through your phone or computer by clicking on to the company’s website.
No collateral is needed
When you are applying for a long term loan, lenders need collateral so they can use it as a repayment just in case you are unable to finish off the repayments. Short term loan lenders do not require collateral at all. They are aware that the loans are easy to pay off. Sometimes, they may check your income and credit score to make sure you can pay off the amount you are asking for.
The benefits of taking short term loans always outweigh the disadvantages. When you are stuck in a financial situation, you can take up a short term loan. Ensure the loan is within your monthly expenditure to avoid the consequences of late payments.