A short term loan is financing to someone in need of it but it is attached with a quick repayment schedule. This type of loan is usually offered for a short period of time. This could be anything from a few days to a few months. These short term loans tend to be significantly shorter than the regular loans. They can usually be repaid early if you want to.
Eligibility for short term loans are always dependent on the credit history and score. Payday loans with no credit check do not exist, lenders will always perform a credit check to ensure that they are lending responsibly.
What are Secured Loans?
There are numerous types of secured loans, including mortgage loan, non recourse loan, repossession and foreclosure among others. A mortgage is a secured loan because the house is always put up as collateral. Once you default on your mortgage payments, the bank reserved the right to take possession of your house.
In a nutshell, a secured loan is the safest loan, because it gives the creditor some form of security and gives the debtor an added advantage.
Benefits of Short Term Loans
A short term loan carries some advantages over the long term loans. They are always offered to individuals that are in need of quick financing. The primary benefit is that short term loans are immediately delivered thus enabling the borrower to operate with increased liquidity. The brief repayment schedules don’t require serious commitment either, thus the borrower is not indebted to the lender for a significant period of time.
While there are benefits, there are shortcomings too. Some of the shortcomings are that short term loans do provide less money with higher interest rates. Before they are granted, a lender has to review the company’s cash flow history and repayment track record. In short, they are unsecured as compared to the long term loans. They do not contain collateral as the bank relies on the credit history and score of the borrower. Another disadvantage with short term loans is that it has higher penalties if a default is issued.
Something else to consider is that here is no collateral with unsecured short term loans. This is an advantage to the borrower but a disadvantage to the respective bank offering it. Before seeking for a short term loan, the best advice is to check on the conditions of the bank that it is offering it. Lack of proper knowledge can make one pay higher penalties.
Overall, the decision about whether to take out a short term loan will depend on your personal circumstances.Apply Now!