When Time is of the Essence: What are 4 Distinct Advantages of Short-Term Loans?
For many people, a short-term loan provides the cash injection they need to solve their personal financial problems. Rather than going to a bank, taking out a long-term loan, and having to worry about monthly installments, short-term loans meet their financial goals, with none of the hassle.
Firstly, what is a short-term loan? A short-term loan is when a lender provides you with a set amount, based on your repayment ability and financial circumstances, which you pay back in full, within a set period of time. You can find more information on short-term loans here: https://prettypenny.co.nz/same-day-loans/
Short-term loans are not for everyone. You must have the financial capability to pay it back on the agreed day or could incur costly penalties. But if any of these advantages appeal to your financial circumstances, a short-term loan could provide you with a much-needed solution to your cash-flow problems. For instance, a short-term loan like Pine Financial Group bridge loans can be ideal for real estate investors looking to bridge a financial gap – such as when looking to purchase a new property before selling an existing one.
They can improve your credit score
People with poor credit history often use a short-term loan as a fast way to improve their credit score. Many short-term loan lenders have less stringent requirements regarding borrowers lending scores.
This means, even if other lending establishments have rejected you, short-term loan providers may still accept you. Providing you pay the amount back on time, you can use this as a way to climb the credit ladder and improve your credit history.
Shorter waiting times
Short-term loans are processed on the same day, meaning the money could be in your account in just a few hours. For cash emergencies, when you have to make an unexpected payment quickly, short-term loans can be a useful borrowing tool.
You don’t need to put up collateral
For long-term loans and mortgages, lenders often require collateral. Short-term loans do not. You do not have to borrow against your house, car, or anything else of value, leaving you free from anxiety and worry.
Better financial predictability
With a short-term loan, you know you will have paid off the outstanding debt, in full, at the next payday. You know the amount you will be paid, and the amount of the debt, giving the loan a strong element of predictability.
Long-term loans, paid back over several years or decades, have a certain element of unpredictability and risk in them. You don’t know if your financial circumstances several years in the future will be the same as today. Nor do you know the future economic conditions, and how far your paycheck will go towards your living costs.
You may find yourself trapped in a loan with monthly payments that you are suddenly unable to afford.
Short term loans provide a clear breakdown of any interest costs up front. With nothing hidden, and no lengthy repayment period, you will have a clearer picture of your ability to repay the loan.
If any of these advantages appeal to your financial situation, consider taking out a short-term loan today. There are no waiting times, and you could find yourself approved for a loan of up to $1,000 in just a few hours.
