Taking out a loan can help you out in all different areas of life. From funding a new car, to taking out a personal loan help with that next holiday. When you choose to take out a loan, considering the length of the loan is just as important as the amount of money you plan to take out and the interest rate.
Short-term loans can give you a quick cash injection when you need it, to tide you over if an expected payment comes up. But there are plenty of other reasons you might consider taking out a short-term loan. Here are some of the advantages of short-term loans.
What Is A Short-Term Loan?
A short-term loan usually refers to a loan that has been taken out and is repaid with interest within the year. Each loan will be different and have its own set repayment terms. There are many advantages of short-term loans, giving you access to the cash you need as fast as possible.
5 Advantages Of Short-Term Loans
Short-term loans are just that. They are designed to be paid back quickly, so it means you need the cash coming into to meet those repayments. They are often used when an emergency pops up that you hadn’t planned for. For example, if you find yourself in a car accident and needing to pay for repairs. Or perhaps if you fall ill and have a big hospital bill. Here are just a few advantages of short-term loans:
1. Fast approval:
Often when you are looking to take out a short-term loan it’s to cover an emergency. That means that you need the cash as fast as possible, without the long-drawn-out process that can come with the lengthier loans. Most short-term loans can be applied for online, and once approved, you can have the money in your account that very same day, or the next business day. The approval process is nice and short, with money deposited directly into your account.
2. Improve credit rating:
Taking out a short-term loan can actually help you improve your credit score. As long as you have the means to pay it back, it will reflect well on your credit score. It will show you have met the repayments and paid back the loan on time, noting you as a trustworthy borrower. It could be just the boost your credit score needs.
2. Less interest:
It stands to reason that the longer you borrow the money for, the more interest you pay. With a short-term loan, you are borrowing the money for a shorter space of time, which means the interest won’t be as much as longer loans. If the interest rate is higher, you will save money by paying back the loan faster.
3. No assets needed:
This is just one of the advantages of short-term loans. As the amount you are borrowing is less than longer loans, lenders often don’t require you to secure the loan with an asset. The smaller cash amount takes away the risk of the loan, which means there is no extra pressure on you when borrowing.
There are a huge variety of different lenders who all offer short-term loans. Many of these are tailored to your specific needs, allowing you to choose a loan that suits your individual circumstances. You can choose from a bank or a non-bank lender and find the right lender for you. The short nature of the loan means you don’t have to make a huge commitment. It’s up to you to negotiate the length of the loan and what works for your.
What If I Have Bad Credit?
One of the best advantages of short-term loans is that they are often also available to those with bad credit. This means your credit history won’t hold you back if you need the funds. Most lenders will simply require proof of your income, along with your spending history, simply to determine whether or not you have the means to pay back the loan.
Many lenders don’t even check your credit file when offering you the loan. By choosing to go with a non-traditional lender such as the Australian Lending Centre, your individual circumstances will be taken into account when you apply for a short-term loan. This gives you the best opportunity to secure one.
A short-term loan can get you back on track financially, giving you the cash boost you need to get back in control of your finances.
Advantages Of Short-Term Loans
Now you understand the advantages of short-term loans, you may be looking at taking one out. The Australian Lending Centre is committed to finding the right loan for your situation. We can help you explore different types of short-term loans and use their expert knowledge to get you the best deal.