There are emergencies and crises that are unexpected and we might not always have the financial resources to tide us over these unfortunate situations. When this happens, one of the possible solutions we could work out is borrowing money.
There are various types of cash loans you could apply to but if you don’t want to be burdened by paying for a loan for a long time, applying for short term credit could be the most appropriate choice for you. Like all things, there are advantages and disadvantages to short term credit. Weigh the benefits and demerits and see if it is indeed what is suitable for your situation.
Advantages
Less Interest
Since you would only be borrowing money for a short time, these are called short term loans. The accrued interest would be lower compared to when you are paying the monthly minimum payment for a long term loan. Although the monthly interest rate is higher compared to other types of loans, you would still be able to save more in the long run.
Flexibility
Applying for short term credit offers flexibility and the process could mostly be done online. Lenders have websites with application forms that you could fill in to provide all the necessary details they require to process your application. Once the application is processed, you will either get a call from their representative or any other means of communication as you prefer.
Less Stress
When you think about the period and duration of when you need to settle what you owe, you have the tendency to feel overwhelmed and it might contribute to your daily stress. When you apply for a short term credit loan, you will not have this problem since you would be able to settle everything you owe after several months or a year.
Disadvantages
High Cost
Since you would be paying back what you owe over a short period of time, the monthly payment is significantly higher in contrast to other types of loans since the principal amount plus the interest would be divided into fewer months only. If you would not be able to sustain paying for the amount for a couple of months, opt for other types of loans.
Negative Impact On Your Credit Score
Short term credit loans are like a double edged sword when it comes to affecting your credit score. If you manage to settle it without any delay or fines, it would significantly boost your score. But, if you fail to make a payment on time and you are not able to pay it in full within the deadline, it would negatively affect your credit score.
Like other major decisions that we have to do, applying for short term credit should be something we decide upon after serious consideration. Now that you are aware of the advantages and disadvantages, look for online lenders that focus on loaning short term credit since their plans and packages are suited for those borrowers who prefer to finish their debt as soon as possible.
