Learning About Finance and Money

3 Advantages Of Short Term Loans

26 February 2016

Jordy De Pijper

If you need cash, sometimes, it is best to seek a short-term loan. Short-term loans are designed to allow a borrower to receive money quickly and easily. Often this type of loan is funded by capital from multiple lenders or sources. Thus, short-term loans are generally available regardless of the borrower's geographical location. Here are a few advantages of receiving a short-term loan:

Flexibility in Terms

The terms that govern a short-term loan are usually appealing to a wide variety of people. Because a short-term loan allows you to borrow and pay back money in a reduced time frame, the terms associated with the loan may provide more payment options.

Specialized terms, such as balloon payments, are often available. A balloon payment allows the borrower to make small interest-only payments at the beginning of the loan. At the end of the short-term loan, the borrower is expected to pay the remainder of the loan balance. This type of option permits the borrower who is expecting a large sum of money in the near future to meet his or her immediate needs and still pay back the loan as promised.

No Collateral Needed

Short-term loans are often unsecured, which means that the borrower is not required to put up any collateral as security for the loan. This is an advantage because it does not require the use of assets.The borrower would simply apply for the loan to receive the needed funds. In addition, if the borrower encounters an unexpected financial problem, he or she will not be forced to give up essentials, such as a house or a car that was used as collateral.

Wide Variety of Loan Uses

Short-term loans can be used for many different reasons. The repair of a car, the purchase of business equipment or even a much needed vacation are all valid reasons for short term loans. The loans can even be used to pay other lenders during times of financial difficulty.

Quick Turnaround Time

Short-term loans usually offer rapid approval. This is important for someone who needs money quickly. There is no lengthy wait after the application is submitted.

The quick approval is often possible because there is no need for an appraisal associated with assets that are being used as loan collateral.

If you are interested in receiving a short term loan or have questions about a loan, contact a lender like Advance U Cash in your area who specializes in short-term loans.

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