A Definitive Guide To Short Term Loans

Short term loans? Payday loans? Instant Payday Loans? Personal Loans? Any others….? If you are finding yourself overwhelmed by the sheer number of different loans available then have a read of our guide to get yourself familiarised.

Today we’re going to be looking through the many different types of short term loans that are available, weighing up the pros and cons to each to help you decide which option could be best for you.

What Is A Short Term Loan?

The answer to this question is a matter of opinion, however most experts will agree that any loan under 12 months is considered a short term loan and generally speaking these types of loan are provided by companies other than high street banks and building societies. The following loans can all be consider ‘Short term loans’

These loans actually originated in the U.S but go by several other more american terms such as cash advances or short term cash advances. It wasn’t long before they caught on in the UK though with many smart business people realising how big the industry could be especially in the current economic climate, new lenders seemed to be popping up literally every 5 minutes and an onslaught of day time TV advertising campaigns were soon to hit us. This brings us on to another interesting fact, studies show that the majority demographic for individuals taking out short term loans are women between 25-40 years old, single or separated, with is why most of the marketing campaigns are tailored to target women over men.

How They Differ To Personal Bank Loans

The key difference between these loans and regular bank loans for individuals is the timescale, generally speaking you won’t be able to get a personal bank loan with a payment schedule of less than 12 months however with a short term loan you could pay it back in just a matter of weeks. The other point to consider is the amount you can borrow, the reason that personal loans are a minimum of 12 months is due to the fact that you can borrow a much larger amount and so if this was paid back over a short time scale the repayments would be very hard to manage.

The Benefits

The key benefit to this type of loan is that believe it or not you can still be accepted even if you are credit rating is.. how shall we say.. not quite up to scratch. A lot of people feel that they are left with very little options if they have bad credit which is why loans like this have been getting a lot of praise; they are a simple borrowing option for those people that would normally be refused credit by the high street banks.

Another plus point is the speed at which you can have the money in your account, if you find yourself in a real emergency situation you could have the money you need to borrow within a matter of minutes, this is something you will not find in any other kind of loan and helps people with their financial problems every day.

So there you have it, our guide to short term loans, remember these loans are just like any other kind of loan when it comes to the responsibilities you will have so remember to do your research, budget your money and only choose a loan that you are 100% comfortable with.

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