Short term loans can offer people additional cash right now. That cash can be used for a variety of reason. People mostly use this cash to help them make ends meet, by solving their short-term cash flow problems. If you need cash now, check out our recommended list of the best short-term lenders.
These types of loans should not be considered long-term solutions. More typical longer-term loans are better options for mortgages, auto financing, and even debt consolidation. We suggest that you talk to a counselor before proceeding. There are many reputable nonprofit counseling services available. Check your local listings to find a counselor in your area.
For those people who are in need of cash right now to help them get over a short-term financial issue, signature loans can help. If you have questions about these short-term debt instruments, the Q&A below will likely help to answer those questions.
How much can you borrow with short-term loans?
You can usually borrow up to $2,500. However, the first time one of these lenders works with you, they are likely to offer you a smaller loan. They will usually advance you as much as $1,500 this first time. Once they see that you are paying off your loan in a timely manner, they will gain confidence and offer you larger loans in the future.
The amount that you can borrow is also predicated upon several other items. The amount that they will loan you is determined by your monthly net income, the amount of time that you have been employed by your current employer, if you currently have an outstanding advance – outstanding advances include: paycheck advances, pay day loans, short-term loans, payday cash advances, signature loans, unsecured loans, etc. with them or even with a different short-term loan provider.
IMPORTANT: It is not uncommon to be declined for a short-term loan with one provider if you currently have pay day loans, unsecured loans, short-term loans, payday cash advances, paycheck advances, payday cash advances, and signature loans with more than one other loan provider. The reason for this is that it just doesn’t give the loan providers the confidence that you will be able to repay your loan.
How much do short-term loans cost?
Fees vary from lender to lender. No matter which short term pay day loans lender you choose, the fees (on an annual percentage basis) are going to be extraordinary. As a rule of thumb, most short-term lenders charge about $25 for every $100 that you borrow. So if you borrow $1000, you will be charged $250 in fees. So cumulatively, you will owe $1,250.
How fast can you get a short-term loan?
Once your application has been approved, the money is available quite quickly. Most short-term lenders will deposit the cash into your checking account on the very next business day. In some cases, lenders will transfer your cash advance on the very same day.
A couple of lenders are now offering ATM cards that act as debit cards. Once you have a card with these lenders, you can use the cash immediately. After you have paid off the existing loans, new loan requests will be funded to your existing ATM card (from that lender) on the same day. In fact, they’ll typically have the money in your ATM card within an hour!
What are the short-term loan requirements?
- Full-time employment
- Minimum of net pay of $1,800 per month
- Usually these lenders want you to receive your paychecks at least twice a month
- You must have a functioning checking account
- You must be at least 18 years old
- Most require that you have direct deposit set up for your paycheck
- Most require that you be a U.S. citizen or permanent resident
Do you need a fax machine for short-term loans?
These days, most of the lenders that specialize in short term installment loans do not require you to fax any information.
How are short-term loans funded and repaid?
Most short term lenders require pre-authorization in order to electronically transfer cash into your checking account. Typically, they will also secure payment from your checking account on scheduled repayment dates.
What if you have no credit history or bad credit?
This is not a problem. Most short-term lenders do not check your credit with the major credit reporting agencies. Many will however, do utilize TeleTrack and CL Verify. These are customer reporting services that provide information on lending, payment, and on your check writing histories.
Do you need collateral for short-term loans?
No, most short-term lenders do not require that you put up collateral when requesting these loans. The loans are considered unsecured loans. The lenders offset their risk by charging very high fees as was mentioned above.
How long do you have to repay short-term loans?
Most short-term loan lenders require you to repay the loan, in its entirety within one month. Some will give you a bit longer. Some lenders will allow you as much as three or four months to repay your loan.
Can you prepay short-term loans?
Many of these lenders will allow you to prepay all or any portion of the outstanding balance at any time without incurring any penalty. In fact, if the short-term loan is prepaid before its final installment date, you may be entitled to a rebate of the unearned finance charges.
Can you extend the repayment date?
This varies by lender and by state. Each state has their own set of rules and regulations for these short-term loans for people with bad credit.
Even if you state and lender allows you to extend the loan, it is in your best interest to pay off these loans when they are due. The financing charges are considerable. As mentioned above, these loans should be considered stop-gap measures. They are not long term solutions.
Also, by extending the repayment period, most lenders will charge an additional fee. So it is advisable to pay off your short-term loans when they are due.
Are online cash advances secure?
Most (if not all) online short-term lenders have very secure websites. Many use an SSL certificate for added security.
Can you request more than one short-term loan at a time?
Most short-term loan lenders will only allow you to have one cash advance at a time. After your final payment on your loan clears, most lenders will allow you to get another loan in about a week.
Short-term loans help people get over a difficult period. They allow you to get cash right now. The cash is very expensive, but if you need it and have exhausted all other potential avenues for cash, then look foe one of these loans. However, make sure to repay the loan on time. Also remember, these loans should not be thought of as a long term solution. If you need cash now, check out our recommended list of the best short-term lenders.
- Charge you late fees
- Send your account to a collection agency
- Report your information to a consumer reporting agency, which may negatively affect your credit score
- Offer to renew, extend or refinance your loan, which may cause you to incur additional fees, charges and interest