In an ideal world, everyone would have enough money in the bank to cover themselves on a rainy day; but unfortunately, that simply isn't the case. The majority of people live pay check to pay check and find it difficult to save. Therefore, when there is an emergency, it is common for people to apply for a short-term loan.
What is a Short-Term Loan?
A short-term loan is a loan that is borrowed over a short period of time, typically 6-12 months. The amount of the loan is larger than a pay day loan and there is more flexibility in terms of making repayments. Although payday loans are a quick way of getting the funds required to pay for the things you need, there is a lot of pressure when it comes to making repayments. The main reason for this is that the total amount borrowed must be paid back on your next payday. If another financial emergency comes up, the borrower is subject to late fees.
Short term loans allow the borrower to pay back a small chunk of the loan each month which provides extra time and space to pay back the loan.
How to Apply for a Short-Term Loan
The application process for a short-term loan is not as stringent as a secured or an unsecured loan. Your credit history is not typically a factor, what lenders are interested in is whether you are capable of paying back the loan. Therefore, the most important element of the eligibility criteria is your income.
Applicants can submit a form online or complete it over the phone; the lender will require information such as name, date of birth, address and proof of income, you will also need to provide proof of your identity. Once everything has been approved, the funds are usually transferred into your account within 24 hours.