Unexpected expenses and sudden emergencies can derail your financial plans for the month. Sometimes, a few hundred dollars can help in sailing through a bad month. If you are looking for an advance but don’t want to ask others, short-term loans can be a good alternative. Online loan services, such as Net Pay Advance, offer such advances with simplified terms and conditions. In this guide, we are discussing the basics about short-term loans.

Types of short-term loans

Based on which state you live in and other factors, there are different kinds of short-term loans to consider. The most common of all is a payday loan, which is due on your next pay day, and you can borrow as much as $1,000. In case of payday loans, the next pay date should be at least 8 days away, but no more than 31 days away. The second kind of short-term loan is an installment loan, which is repaid in installments, and the term is usually 180 days or less. If you want more flexibility in repaying the amount, installment loans may work better for your case, and it is possible to borrow a higher amount, often as much as $1,500.

What are the advantages and disadvantages?

The biggest benefit of short-term loans is quick access. You can expect to get money in just one business day, and approval is instant with most reliable services. Secondly, you don’t need an asset or collateral to get the loan, and most lenders don’t bother much about the credit score, although a soft credit check may be done. The requirements are pretty simple too. As long as you have a job/stable source of income, are aged 18 years or above, have an active bank account and valid identification details, you can expect to get an approval.

On the flip side, short-term loans come with a higher APR, so you pay more in terms of interest, and there is also an initial fee that must be paid. If you do not repay the loan in time, you cannot apply for a second loan, and your credit score will be affected.

Things to understand

The good news is you can apply for short-term loans online, and no one needs to know. With installment loans, you have complete freedom to repay in smaller amounts, so this doesn’t impact your finances adversely. That said, payday loans often suit certain situations better. If you are unsure of which kind of short-term loan you should consider, talk to the lending services. Also, select a lender you can rely on, and don’t shy away from asking relevant details.

Final word

Read the terms and conditions before you apply for payday loans or installment loans. While short-term loans are great for getting quick money, repayment should be done in time, and it is always wise to have some plan to handle your finances better, so that you can stick to the schedule. Check online now and apply for the right short-term loan now!