There are many assumptions made about different types of loans and it is a good idea to make sure that you actually know the facts about them rather than just the rumours. This is sensible because it means that if you do need to borrow money at some point in time, you will be in a position to do this in an informed way rather than just guessing at what you might need. Many of us do not know a lot about finance and then when we need to take out loans, we do not really know what might be the best for us. Therefore, knowing all about the different types of loans and how they work as well as who they are for is really important. So, what about short term loans?
Main features of short term loans
Short term loans differ from other loans in a few main ways. Firstly, they do not last very long, hence the name. They tend to be repaid in full, when the borrower gets paid next. This means that it is necessary for them to make sure that they have the money available. Paying it on payday means that you are much more likely to have the money there, but you will also have other things to pay and you may have other payments leaving your account on that day so you will need to make sure that you have enough to cover it. You will normally be expected to repay the whole lot that you borrowed in this on payment, but you will need to also make sure that you are able to cover the interest and fees as well. It is important to make sure that you are aware what these costs are to check that you can afford it all.
The loans are also available to a lot more people. This is because the lenders do not only lend to people that have a good credit record but will consider others as well. This will mean that if you have had problems in the past or more recently, that there is a high chance that you will be able to still borrow some money if you need it. You will need an income though to be able to get a short term loan.
The loans can also be arranged very quickly. It is often the case that you will be able to get the money that you need within a few hours of applying. This does vary between lenders though and so if you do need the money really quickly, you will need to check to see which will be offering this very fast service. There are some lenders which will also be open all of the time. This means that if you need money at weekends or during the evening, you will still be able to get it. This is something that is not offered by many lenders as they will often just be open during regular office hours. Therefore, if you do need some money at this time, then they can be a good option to look into.
Who are they for?
So the loans are really aimed at people who need money really quickly and do not have a good credit score. However, they can be useful in other situations where you need money quickly and you cannot get it elsewhere. So, even if you have a good credit score, you may find that they will be useful for you. So, it is not a loan type that you should automatically rule out, as you never know when you might need it.