Who doesn’t like the idea of short term loans? When you get a short term loan you don’t have the burden of a long term loan hanging over your head which is ideal. However, are these really ideal for all borrowers? If you are thinking about getting a short term loan, you need to firstly know the pros and cons of these loans. Read on to find out the pros and cons of short term loans.
Pro – You Can Borrow a Smaller Amount
You can visit a direct short term loan lender and get a more appropriate loan amount. For example, if you only needed to borrow $200, you could stretch the repayment for one or two months. That really allows you to borrow money quickly but not have the hassle of a long-term repayment schedule over your head. It’s ideal to say the least and certainly something you will enjoy too. Of course, being able to borrow a smaller amount benefits those who don’t want a long term loan; and they are easier to manage.
Con – You Have a Shorter Repayment Time
One very big drawback you have to be wary of when it comes to a short term loan is how long you have to pay the money back. In most cases, short term loans can be anything from one month to twelve months and you have to be able to pay the money back within that time period. It’s totally different if you only need money until the next payday and you can afford to repay the sum back but if not, it’s tough. A lot of people do think short term loans are great but that they just struggle after so long with them. Shorter repayment times essentially mean larger payments required.
Pro – Quicker Approval Times
However, when you look to a short term loan, it might be possible to get a faster loan approval time. That is not only ideal for those who want to borrow money but also those who need to get the money into their accounts pretty quickly too. It’s something a lot of people don’t think about or realize and yet it’s so important to know. Quicker approval times help lots of borrowers and you can easily find a good direct short term loan lender who can offer a quicker approval time too.
Con – Interest May Be Set Slightly Higher
In all honesty, some loans can have higher interest rates than others. With short term loans you are more likely to see the interest rates being set slightly higher, even though there haven’t been any credit checks. Why, then, is there sometimes higher interest? It’s down to the fact that you are repaying the loan over a shorter period of time. That essentially means you will find you are paying a higher interest rates for the loan period. It’s not always set extremely high but sometimes it can be so it’s something to watch out for.
Borrow When You Need To
There are always going to be good points to borrowing money with a short term loan and bad points; it’s natural and it’s something, which you have to know and understand. In truth, these aren’t the worst loans you can get but they can be bad if you don’t really have the ability to repay within a shorter period of time. You have to think carefully so that you can get the very best loan possible. A direct short term loan lender might be ideal for you but again, know what they offer you first.