Since this new trend involving short term loans hit the headlines, more and more people are coming to realize the tremendous benefits of these types of loans. The truth is that we do not enjoy languishing under a heavy loan burden for too many years. A long term loan comes with more stress and a higher interest rate than we’ve ever expected. On the other hand, a short term loan offers you the benefit of a higher degree of reliability, lower interest rate and less stress.
Short term loans can be provided for more purposes, including home improvements, educational expenses, auto repairs, business investments or clearing smaller debts. A short term loan comes with several unique advantages that can’t be neglected. Let’s have a look at some of the most important benefits of these payday loans.
Extremely Low Interest Rate
First and foremost, one of the biggest advantage of a short term loan is the amazingly low interest rate it comes with. Online lending companies, banks and financial institutions that offer these types of loans have one thing in common: low interest rates. If in a normal economy the interest rate for a short term loan is usually higher than that of a long term loan, in a recession economy the exact opposite is true. You can save up to 20% if you contract a loan on a shorter period of time (less than one month).
Good For Bad Score
Another tremendous advantage of short term loans is that they are quite useful for people with a bad credit score. If you have a bad score, you are forbidden to take further loans. However, by leveraging the benefits of a short term loan, you can repay all your existing debts and consequently improve your overall credit score. If you take a short term loan over a 6-months period and repay it in less than two months, your credit score will improve dramatically. After that, you will be able to take a new loan at a much lower interest rate.
Accessible payday loans
You can ask for a payday loan anytime you want and it will be available in less than 24 hours. This is a huge advantage, because you can use this money whenever you need an extra $200. You can repay this loan in less than one month at an interest rate of less than 5% (in some cases you can pay up to 10%). Because there are thousands online lending companies eager to help you and the application process takes less than one minute, taking a short term loan is as easy as pie.
However, be extremely careful when choosing a lender, because there are many scams online. Keep your eyes open and look for reviews before choosing a lender to work with.