The following is a guest post brought to you by Yeti Loans.
Loan (Photo credit: Philip Taylor PT)
Since the financial crisis of 2007, short term loans have increased in popularity among consumers because they are useful to help individuals get by until they get a steady stream of income. As more and more people rely on contract work instead of steady paychecks, and possibly government assistance, a short term loan can really help bridge the gap until there is money in the bank. Here are some things to take into consideration when getting a short term loan.
[FG] Like on other posts about short term loans, while these can sometimes help, I always recommend that you have savings first: this is why it’s good to save during the better times, so you don’t need to get a loan.
The Positives
The biggest positive of getting a short term loan is the ability to get the right amount of cash to make it by. When I talk about short term loans, I’m talking about loans that are less than 30 days. These loans can help you maintain a positive credit score, since they could allow you to make any upcoming payments on time.
These loans are also relatively easy to get, and most can be funded within one business day. So if you need quick cash for a short period of time, a short term loan is the way to go.
The Potential Negatives
There are several potential negatives to be aware of as well when considering getting a short term loan. I say potential, because every loan and situation is different, and if you’re responsible with your borrowing, you probably won’t encounter these situations.
First, short term loans typically have higher fees and interest rates than longer term loans. However, this is also connected to borrower credit history and more. Since short term loans are viewed as riskier, lenders do charge more. Plus, while the fees by themselves aren’t high, it is when they are looked at as a percentage of the amount borrowed where they can be high. Just make sure that you know exactly what you are getting into when you borrow.
Second, there are consequences for not paying back your loan, just like there would be with any other type of debt. Make sure that you realize exactly when payments are due, because not paying back your loan timely can result in more fees, and negatively impact your credit score.
This guest post was brought to you by Yeti Loans.
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