Even if you generally manage your finances well, an unexpected expense like a medical bill or home repair can quickly put you in a bad financial situation. If you don’t have enough savings to cover the expense, and don’t have access to a credit line, a short term loan could be your best option. Anyone with an income source and a chequing account is generally approved for an unsecured short-term loan. Find out if a short term loan is a good option for your financial situation.
What is a Short Term Loan?
Temporary funding for business or personal use is best obtained through short term loans. Short term loans may also be a good option for those who are not yet eligible to apply for a traditional loan from a bank or credit union. Unlike a conventional loan, which is usually paid back over a few years, short term loans must be repaid usually within a few weeks or months. Additionally, short term loans often need to be repaid weekly as opposed to monthly.
While the terms depend on your creditworthiness and the lender you choose, most short-term loans also have higher interest rates. You want to carefully consider the interest rate when applying for a short-term loan. Though the initial loan amount may be small, you could end up paying much more because of the interest. Other important aspects to consider include origination fees, early payoff fees, late penalty charges and refinancing options. If you are confident that you can repay the loan in a short amount of time, the interest may not be an issue.
Benefits of Short Term Loans
Short-term personal loans can be helpful when you are experiencing a temporary cash-flow problem, but they should not be used as a permanent financial situation. Here are some of the advantages of short term loans:
- Quick cash: A short-term personal loan is usually disbursed to your bank account within a few days of approval. Most loans can be applied online, and it is often unnecessary to visit a bank to fill out paperwork. If you need cash quickly, these loans may be a good option.
- No collateral needed: Long-term loans may require you to put up your house or car as collateral. Most short-term loans do not require any form of collateral because of the repayment terms. You can receive the money you need without risking your assets.
- Minimal commitment: Some loans require you to make payments for years. Short-term loans however are repaid within a few months and do not require a long-term financial commitment. You can pay the loan off quickly and move on.
- Flexibility: Short-term lenders understand that borrowers may need extra time to pay back their loans. Therefore, many lenders offer refinancing options or alternative repayment methods to meet your needs.
- Eligibility requirements: Some long-term loans require a high income and an established credit history for approval. Many short-term loan lenders make it easier to get approved and may still work with you if you have less-than-perfect credit.
- No credit required: Most short-term lenders accept applications from those with poor or limited credit histories. Some lenders may even offer credit repair services as well as loan options.
Can I Get a Short Term Loan With Bad Credit?
It is possible to get a short-term loan if you have less-than-stellar credit. In fact, many people turn to short-term loans particularly because of their flexible credit requirements. For a borrower to qualify, most lenders require a valid chequing account and a stable income. Most lenders also consider self-employment or monthly benefits as income for approval purposes. The amount you qualify for depends on the lender, but those with higher incomes often qualify for more money. While good credit is not a requirement, you may receive more favorable repayment terms if you have a solid credit profile.
Get More Loan Options with LoanConnect
If you are experiencing an unexpected financial emergency, short term loans may be an excellent solution for quick cash. See what loan options are available to you through LoanConnect, Canada’s premier loan search engine. We have an extensive lender network to help you find a loan offer that meets your financial needs. Because of our broad network of lenders, those with poor credit have a better chance of approval. Using our search engine is a fast, secure, and discreet way to apply for a short-term loan. Don’t wait any longer for your bank to approve your loan request. Get the money you need today by applying for a short-term loan with one of our lenders. In most cases, you can get the cash by the following day. Apply now to find a loan that works for your unique situation.