Short Term Loans-your guide to pick the best one
Updated: Aug 30, 2021
Short term loans are the ones that are borrowed mainly to satisfy temporary personal or business capital needs. Obtained for a shorter period of time this kind of credit has a capital amount and interest that needs to be paid back at a given due date, which usually varies from one to two years. A short term loan acts as a valuation option for small businesses or start-ups that are not yet eligible for a credit line from bank. The loan amount for is small and is suitable not only for businesses but for personal financial problems that are sudden and of temporary nature.
Short term loans exist for the very reason to be paid back immediately and to be considered only for temporary needs and solutions. In fact, in most cases, they need to paid back in as soon as six months to a year or maximum up to an year and a half. Anything above that is by default considered medium term or long term loans. In some cases, the period for small loans is just assumed and lets the borrower pay back the amount in frequent installments until the loan is completely paid off.
Various kinds of short term loans are:
1. Merchant cash advances: As the name suggests, such a type is a cash loan paid in advance to the borrower for carrying out his business activities. The payment for such a loan is made by the borrower with a share of his earnings from the business itself. Each time a purchase is made by a customer, a certain amount from that directly goes in the pocket of the lender.
2. Lines of Credit: A line of credit is mostly like using a credit card only its for business. The credit limit is set, and the borrower can pay back the amount in easy installments. The advantage of line of credit over business credit card is that the latter gives access to lower Annual Percentage Rates (APRs).
3. Salaried loans: They are the kind of short term loans that are borrowed against one’s salary. The concept remains that the borrower gives loans to salaried professionals after analyzing their background and the repayment is to be made in lump sum once the salary is credited at the end of the month. One such company that offers salaried loans is Credset. They provide instant short term loans and ease of borrowing.
4. Online or Installments loans: Probably the easiest way to procure short term loans is to do it online. Everything is instant and easy, and the loan amount is wired to the borrower’s bank account immediately.
Effective source of emergency funds, Short term loans are easy and instant. Visit Credset to know more