How Short Term Loans Can Be a Boon for Consumers
Short term loans are gaining wide popularity among consumers in all financial situations. They offer a wide range of benefits and broader accessibility than many other types of loans while providing average people with access to fast cash to cover emergency medical needs, car repairs, etc.
Why are Short Term Loans Beneficial?
There are many reasons people turn to short term loans for emergency, one-time expenses. One of the most important reasons is that they offer fast access to cash. Sometimes in a matter of minutes after completing the application.
Other reasons to consider short term loans include:
- Short repayment windows (anywhere from a few weeks up to 12 months).
- Easy qualification process.
- Lower interest rates than some credit cards.
- Can help consumers build credit.
- Offers budget flexibility when things go wrong.
- Reduces personal stress over financial matters.
That isn’t to say that short term loans are the best solution for every situation. However, they can be highly beneficial to many consumers who may fail to qualify for other types of loans, are maxed out on their credit cards, or who have made credit mistakes in the past and do not want to entangle themselves with the temptation that credit cards with higher spending limits might provide.
There are many reasons consumers find short term loans appealing. They work best, however, as one-time transactions and as a supplement to a robust personal saving plan to smooth over financial bumps in the road.
Considerations Concerning Short Term Loans
Just as there are many benefits to consider when it comes to short term loans, there are also a few disadvantages to keep in mind. One of the most important considerations is the reputation of the lender. There are many predatory lenders out there. Perform due diligence and make sure you’re working with a reputable organization that follows fair lending practices.
Additionally, be mindful of fees, penalties, interest, and other costs associated with short-term loans. These loans have more relaxed credit requirements and cost less than many of today’s credit cards, however, they are not low-cost loans. The price many consumers pay for fast access to cash in a pinch is riddled with fees and expenses. Make sure you know the costs upfront, so you aren’t hit with nasty surprises when it is time to repay your loan.
Financial upsets are a fact of life whichever income bracket you’re in. When emergencies occur, short term loans offer consumers an alternative solution for handling those emergencies without breaking the budget.
PRBC understands that you are so much more than your standard credit score. We’re working to create genuine financial alternatives and solutions to people with less than stellar credit scores, who are unbanked, or who have no traditional credit score at all. Let us help you show your creditworthiness with an alternative PRBC credit score and report today.