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When you think of a loan, you probably envision obtaining a mortgage for up to 30 years or an auto loan for 5 years. However, you can also take advantage of short-term loans. These loans don't have a high principal to pay back, which means you'll only have to make a few installment payments before reaching the loan's maturity date. Several features of short-term personal loans make them attractive.
1. Access to Quick Cash
Unlike long-term loans that require a lengthy application and approval process before funds are transferred, short-term loans are often completed within 24-hours. That makes these loans an excellent choice for emergencies that can't wait, such as a leaky roof repair or a tooth extraction.
The personal loan gives you the money to take care of the problem immediately and then make payments later to pay it back. You also have the option to pay it back in one lump sum when you get your next paycheck.
2. No Collateral
Short-term personal loans are unsecured, which means they don't require any collateral for approval. You don't have to own a home with equity, have a large bank account, or even a credit score in the excellent range. That makes short-term loans a good choice for a young adult who is just starting out or any individual who has enough to make ends meet but doesn't currently have a lot to put toward savings.
3. Improved Credit Score
Because short-term loans are also reported to the three major credit reporting agencies, individuals can use them to help improve their credit score. Someone can take out a small personal loan and set the money aside to make the payments each month.
As long as the payments are made on time and the loan is successfully paid off, points will be added to the credit score. You can do this a few times to demonstrate a history of making timely payments.
4. Quick Application Process
With a short-term personal loan, you won't have a long drawn-out application process to deal with. Most lenders require proof of identity, such as a driver's license, passport card or book, military ID, Certificate of Citizenship, or a Certificate of Naturalization.
After that, you'll need to prove that you have some income to pay back the loan. This may be a few of your most recent pay stubs or your previous year's taxes if you are self-employed.
5. Wide Range of Uses
A mortgage can only be used to pay for your home and an auto loan is only used to pay for your vehicle. With a short-term personal loan, you'll have the freedom to use the funds on anything you'd like.
You may wish to stick with essentials, like a new heating unit for your home or a fee for your child's college education. Alternatively, you may want to take the money and go on a much-needed family vacation instead. Other uses for the money include furniture purchases, wedding expenses, and holiday shopping.
6. Money Can Be Deposited Directly to Your Account
You'll have several options when it comes to how you'd like to receive the funds from your short-term personal loan. You can request to have the money in cash or deposited directly in your checking or savings account.
If you opt for your bank account, the money may take a day or two to be available for withdrawal, but you'll then be able to write a check or use your debit card to cover the expense you are currently seeking help for.
If you find yourself in need of a short-term personal loan, contact Central Finance. For your convenience, we have six locations throughout Texas that serve the San Antonio, Del Rio, Lubbock, Abilene, and Harlingen areas.
