Qualifying for short term loans is easy and even people with a bad credit score can find these loans available well within 24 hours. But this easy availability doesn’t come cheap and these loans typically come with unfavorable terms and extremely high rates of interest. These unfavorable terms and high interest have the potential of pulling the borrower down a financial crisis from which recovering can be really difficult. If there are more favorable options available you should be avoiding short term online loans but we must also accept at the same time that if you are already having a poor credit rating and facing a situation where getting some urgent cash is really important short loans are the only available choice for you.
But if you have a good idea of what a Short term loan actually is and what are the different available options to choose from, things might be a little easier for you. Generally speaking, loans which are required to be repaid within a year or less are classified as short loans and a few different types of them are available in the market. Let us see what available options do have in this regard.
- Payday loans: This is perhaps the most well-known of all the different types of short-term loans. They are known in many different names but at the base they are all same. The maximum loan amount available is hardly more than a thousand dollars and as one need to repay the loan amount on his next pay day, from which these loans get their name the term is also less than a month. Payday loans typically come with high rate of interest and there is also a loan fee to be paid. The borrower can also extend or re-up the loan in case he is not able to pay back on the due date but in that case, he will be paying compounding interest.
- Pawn loans: Pawn loans are another short-term loan that is quite well known but unlike payday loans this is a secured loan that requires the borrower to provide some kind of personal possession as security and the loan amount depends on the price of object provided as security. The loan term is usually 30 to 180 days within which the borrower must pay the loan back with interest to reclaim his possession or renew it for a fee.
- Short term personal loans: Some lenders do offer short term No Credit Cash Loan or short term personal loans and the borrower can pay back weekly or monthly or as per any predetermined schedule. These loans also typically involve quick payment schedules and high interest rates but are preferred by many as they can determine the payment schedule as per their own convenience.
- Auto title loans: If you have a poor credit rating and other short-term Loan options are not available then auto title loans can prove to be a useful choice as it allows you to use your car as collateral. Normally one needs to pay the loan back within a month failing which your vehicle can be possessed by the lenders.