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In life, there’ll always be times when we find ourselves in a situation where we may be in need of immediate financial assistance. Even if we had never thought of it before, taking out a short-term loan could be the best way to deal with many unexpected financial circumstances. There are different types of short-term loans which meet different needs in different situations. Here’s helpful information about different types of short-term loans.
Cash advances
Cash advance is a service provided by a lot of credit card companies that allows cardholders to withdraw cash up to a certain limit from a bank, through an ATM or some other financial agencies. Cash advances usually have high-interest rates which could be even higher than the credit card rates itself.The interest starts to increase immediately after the money is borrowed. However, cash advances are fast and easy to obtain. The loan amount depends on the credit score of the borrower. More often than not, cash advances should only be used as a last resort.
Installment loans
An installment loan is a loan in which the principal amount and interest are paid in equal installments at scheduled intervals over an agreed period of time.
Installment loans are usually repaid over a long period of time which can be as long as 30 years.
Installment loans are considered safer and more affordable than title loans and payday loans.
When taking out an installment loan, the borrower must use a lending institution that operates in the same state which he’s staying in as all installment loans are serviced locally. Installment loans are fast as it takes only one business day for the money to be deposited into the borrower’s bank account.
Payday loans
A payday loan is certainly one of the fastest and best ways to get instant cash. No matter what your emergency is, applying for a payday loan will get you the needed amount of money in no time. Since the service is really fast and easy to get approval for (and bad credit is almost never an issue), payday loans have very high-interest rates which are higher than conventional bank loans. This is mostly because of the risk that payday lenders take in not seeking collateral from borrowers, lending money to applicants with bad credit history and only asking for basic personal information and documentation.
With payday loans, the borrower usually borrows an amount of money that he can repay on his next payday. Being late in repayment is not a good idea.
Think it through
No matter which type of loan you choose, you should always do it with caution, do proper research, check for licenses to find a good lending institution and never borrow money you can’t repay.
