Most people only think about loans in terms of repayments between somewhere between 15 and 30 years. But, you don’t always need to have a loan with such long repayment terms. There are loan options with shorter terms. Whether you need money for just a short period of time or you are simply focused on repaying the loan in a short period of time, there are short-term loan options that will meet your needs. Short-term loans are beneficial if you only need a small amount of money or you have the ability to repay the loan in a short period of time.
If you need a rather small amount of money, $1,000 or less, payday loans are a short-term loan option. Payday loans provide you with the funds you need until your next paycheck arrives. In most cases, you have to repay payday loans within a month. Interest rates for payday loans are extremely high, some of the highest in the lending industry. You can reduce the cost of the loan by repaying it in a timely manner and not extending it past the initial loan period.
Many banks offer personal, unsecured loans with short-term repayment options. Loan limits and maturity vary by bank and may be negotiable. Depending on your current income and other debts, you might be able to borrow a few thousand dollars and repay it within a year or less. If you have a favorable credit rating, you’ll likely be able to get a low interest rate on the loan. Even with a less than favorable credit rating, your interest rate won’t be as high as that of a payday loan.
Cash advances taken out on your credit card are also an option if you need of money for a short period of time. A credit card cash advance might not technically be considered a loan since there isn’t a specific maturity date. But, the purpose of the cash advance is the same as that of a loan. Before taking out a cash advance, make sure you review the terms and conditions of your credit card agreement so you’re aware of any fees and applicable interest rates for the advance.
There are several options available for short-term loans. When you are making a decision between the options, consider the total amount of money you need, your ability to repay the loan, and the cost of taking out the loan. You should choose the loan with the lowest cost for meeting your short-term needs.