Short term loans belong to the most popular types of loans on the market today. These are unsecured loans that usually involve borrowing a small amount of money for a short period of time. The amounts you can borrow vary from a few hundreds to a few thousands. These loans are available to most people who have a regular income and prove that they can pay back their debts, and they are sometimes available even to people with a poor credit history.
Who Can Get a Loan?
Short term loans are easier to get than most bank loans. Many companies lend small amounts of money for a few weeks or a few months. Generally a short-term loan has to be paid back within three months at most. The interest rates are higher than with long-term loans but the loans are also available to more people than bank loans. A typical example of short term lending is a payday loan. These loans are usually paid back from the borrower’s next wages and if you want to apply for a payday loan, you have to provide proof of income. Most companies that offer short term and cash loans require some form of proof that you have a regular income and that you are able to pay back the money you have borrowed.
However, many companies do not perform credit checks on loan applicants and you can apply even if you have had financial problems in your life and your credit history is bad or non-existent. For most companies it is enough that you have an income that allows you to pay back your debt by the due date. There may be limitations to how much you can borrow especially if you are using the company’s services for the first time. Some lenders offer better deals to customers who have borrowed and paid back loans from the same lender before.
How to Choose the Right Product
There are so many short-term, payday and text loan providers that you should always do some research before choosing to borrow money. Most lenders have websites that list the conditions for lending and that also include an online application form. By comparing a few different sites you can find the best deals because interest rates vary between different lenders.
A lower interest rate should not be your only consideration when applying for short term loans, because the same company that offers low interest may apply hidden extra costs on the loan. These costs can include penalties for paying late or missing a payment, or other costs you should be aware of when comparing loan offers. Make sure you understand all the terms and conditions before making a decision.