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    The Advantages Of Short Term Loans

    Short term loans - which are usually paid back in full within a year - have plenty of benefits to offer.

    Fast approval, helping you repair your credit, and saving you money on interest and other charges are just some of the advantages that accompany this loan type.

    • Many borrowers aren’t familiar with  short term loans. The industry is growing rapidly and offers a great variety of lending products to suit every budget, expense, and credit score.
    • There are actually several key benefits to choosing a legitimate short term loan - especially the money it will save you in the long term. 
    • By selecting the right loan - with the right APR - you’ll be doing great things for your finances.

    Let’s take a look at some of the advantages you could enjoy by borrowing over months instead of years.

    A Positive Impact On Your Credit Score

    One of the best things about a short term is the positive effect it can have on your credit score.

    Your score may drop a few points when you apply for the loan - due to a hard credit check - but it will soon recover and go higher as you make your payments on time.

    • Payment history counts for 35% of your total credit score and you can boost it simply by repaying your loan each month.
    • You’ll also improve your credit mix by applying for a loan if you don’t currently have one.

    More Cost-Effective

    Another great feature of shorter loan terms is that they usually come with lower APRs and other fees.

    • Lenders are sometimes willing to extend a lower interest rate to short term borrowers because they are likely to get their money back in less than a year.
    • Fewer installments (a maximum of 12) means you’ll be paying less in interest charges over time. This can add up to hundreds or even thousands of dollars.
    • This double saving makes these loans appealing to borrowers who want to pay their debt down ASAP.

    Faster To Receive

    Fast approvals are a stand-out feature of short term loans - and technology is speeding them up even more.

    • Online applications make it fast and easy to enter your personal details and upload any relevant documents that the lender may require.
    • Short term lenders operate in a competitive industry and are always making efforts to speed up their approval times. 1-2 days is now the norm.
    • Fast loan decisions can make a huge  difference to your finances - especially if you need some cash urgently to pay unexpected expenses.

    What To Look Out For

    Applying for a short term loan is quick and easy if you know what to look out for.

    Here are some important factors to bear in mind when you apply.

    • The Type Of Loan - Secured loans require an asset - like a car or boat - as collateral but offer lower APRs. Unsecured loans can be more expensive in terms of interest and administrative fees but you won’t need to pledge your belongings and risk losing them if you don’t repay the loan.
    • The Loan Terms And Period -  There are payday loans with repayment periods of several weeks and personal loans which stretch to several months or even a year. If your loan comes with a high APR a few months can end up costing you a significant amount in interest charges.
    • The Interest Rate -  Speaking of APRs, you should always know how much the interest charges will be on a loan before you agree to it. Your lender should give you an estimated monthly instalment amount and interest rate when you apply or when you’re provisionally approved.
    • Hidden Charges - The monthly interest charge isn’t the only cost associated with a short term loan. You’ll want to look out for application fees, document preparation fees, administrative charges, and even prepayment penalties. Some lenders will penalize you for paying down your loan before the end of its term.
    • Down Payments - You may be required to provide a certain amount of cash as a down payment. This is a type of collateral that protects the lender in case you should default on the loan. You’ll need to budget for this amount before the loan can be finalized.
    • Collateral Assessment Fees - Some lenders may charge you a fee for valuing the assets you offer as collateral on your loan. This is especially true of jewelry, watches and other valuables that need to have their authenticity certified before they can be used to secure a loan.


    A short term loan is a quick and convenient way to pay for unforeseen expenses.

    It can also improve your credit score as you pay it down over a short period of time.

    Online lenders have made it easier to apply for this type of Lon than ever before.

    Still, choosing the right loan is essential and there are several important factors to bear in mind.

    The number of installments, APR, down payment and collateral requirements and any fees associated with the loan will determine whether it’s a good call or not.