Finding short-term loan options during COVID-19 pandemic
The coronavirus pandemic has affected everyone in different ways. One of the most severe impacts has been millions of people losing jobs or being furloughed. Stimulus checks were recently sent out to help Americans, but for some people this amount won’t be enough. Others haven’t met the guidelines for eligibility and, as a result, won't receive a check at all. With the current level of economic uncertainty, many people find they may need to explore short-term financing options to help them make ends meet.
Many Americans rely on short-term loans
Prior to the COVID-19 pandemic, personal loans were the fastest growing form of consumer lending. Going forward, chances are these loans will continue to be in demand. Since the health crisis began, 33 million Americans have filed for unemployment. People who have been able to continue in their jobs or run their businesses are not unaffected because COVID-19 related closures could still affect their financial stability.
Some personal loan lenders are attaching stricter terms to their loans, but other lenders are offering modified short-term loan options, such as low-rate and small-dollar loans to people needing quick boosts to their bank accounts. Additionally, some financial institutions have cut fees and reduced interest rates in light of the pandemic.
Loan options for people who need help fast
People who find themselves in a position where they need immediate access to cash should know all viable options before agreeing to any loan. Payday loans are a tempting offer, but borrowers should always be sure they fully understand terms before agreeing to one. Other loan options to explore include:
- Payday alternative loans from credit unions
- Short-term personal loans from banks
- Online lenders
- Credit card cash advances
Short-term loan options are beneficial to people who need immediate access to cash, but the terms can be steep for people who find themselves dealing with predatory lenders. Borrowers should always research the reputation of any lender they’re considering before signing on the dotted line.
Questions to ask when pursuing a short-term loan
Short-term loans are helpful for people who need money in a pinch. Before pursuing a loan, the first detail to determine is how much money is needed and how much would be affordable to borrow. By stretching their budgets too thin, one could find themselves having trouble meeting the terms of their loan. Good questions to ask potential lenders include:
- What are the interest rates?
- How are repayment terms structured?
- What will the monthly payments be?
- Are there any loan origination fees and how much?
It’s always important to know all the terms of a loan. This way, borrowers can give themselves a full financial picture when comparing loan offers.
The types of short-term loans people can get approved for largely rely upon their credit scores. The higher the credit score, the less chance there is of being denied access to credit and of being approved for loans with better terms.
If you’re experiencing financial struggles during the current health crisis which has impacted your credit score, PRBC can help. Our alternative credit score process can enable you to restore your credit and obtain access to the loans you need. To find out more about our services, contact us today.