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Archive for April, 2013

How Short Term Loans When Paid Quickly Can Be a Financial Lifeline for Consumers

By On April 23, 2013 Comments Off on How Short Term Loans When Paid Quickly Can Be a Financial Lifeline for Consumers

For many consumers these days, some situations may arise which may need them to get some cash ahead of their paychecks. If for these people borrowing from banks is too restrictive and slow, and borrowing from friends and family is too embarrassing, there is still another option. They can avail of short term loans which they can apply for online. These loans don’t require credit checks; they just need a bank account and proof that you’re an adult who earns enough money to pay back the loan on the next payday.

These loans are best used for emergency situations, such as:

Emergency Car Repairs

Having your own transport is a necessity for many people, and not just a luxury. If you are one of these people, not having a car can cause you to be late or absent for important business meetings which can have a profound impact on your financial situation.

You can have your car fixed immediately without having to wait for your next paycheck by just availing of short term loans. The application procedure for these loans takes only a few minutes to complete, and then you have the money for repairs within 24 hours.

Buying Medicine

If you don’t have the cash ready to buy medicine in case of an emergency, you can get the money you need from short term loans. The fee you have to pay for such a loan is a pittance compared to what you may have to spend if the medical situation worsens due to the absence of timely medication. Another long-term consequence is that your health insurance premiums may increase as well.

Avoiding Credit Card Late Payments

Being late in paying your credit card bills can have truly horrendous consequences. You have to pay late payment fees, after which your credit card company can then raise your interest rates. Then they will report your late payment to the three major credit reporting agencies, which in turn can lower your credit scores by more than a hundred points. That lower score can then increase the interest you have to pay on future loans, and may even result in rejected loan applications altogether.

Conclusion

Much has been made in the press about the interest rates charged by short term lenders, which in annual terms can be quite high. For example, you may have to pay an extra $30 for every hundred dollars you borrow for only several weeks. Such concerns miss the essential point of short term loans. As its name explicitly indicates, short term loans are great only for the short term. They’re not meant to be carried for an entire year.

This is why short term lenders only lend a comparatively small amount of money, and why they offer very few barriers to prevent borrowers from getting their much-needed cash quickly. They’re for specific situations and emergencies only. When used properly, a short term loan can be a financial lifeline that can save a person from financial ruin.