A short-term loan is a small loan offered to people that are to be repaid within 3 to 12 months of period or even longer for some lenders. The loan amount can range between £100 – £1500 depending on the lender and the eligibility of the borrower.
When are you in need of a short-term loan?
For several years, people have chosen a short-term loan, in order to settle down their urgent bills. They are also for people who are in a financial emergency and need sudden cash. Short-term lenders are popular since they demand almost no collateral while they are lending.
Short-term loans were originally started to offer loans for people with bad credit scores and were refused loans from banks and other lenders. They are also a valuable option especially for starting a small business or a start-up that is not eligible for a credit loan from a bank.
At Bingoloans, your loan application is processed in minutes and the funds are deposited into your bank account instantly. The entire loan process is carried out online and there is no paperwork, neither you need a guarantor.
Advantages
- Lower rate of interest as compared to long term loans since the payments are to be paid off within a year
- The processing time is short so the funds are obtained very fast
- They are the lifesavers for small businesses or people who have suffered from bad credit scores
- The needs of such loans are usually easy to acquire since they are for smaller amounts as compared to the amount borrowed on long-term loans.
- The borrower is not bothered with heavy monthly payments since they involve a small loan amount.
- The loan amount is paid off sooner.
Different kinds of a short-term loan
A short-term loan comes in various forms:
1)Cash Advance:
- This kind of loan is a cash advance but is still termed a loan
- The lender is allowed to access the borrower’s credit facility for the loan repayments
- When a purchase is made by a customer of the borrower, a certain percentage of the amount received is taken by the lender
- This continues till the loan is repaid
2)Payday loans:
- This is an emergency short-term loan that is quite easy to obtain
- The borrower has to pay back the entire loan amount in a lump sum when the payday arrives
- Repayments are done by the lenders through direct access to the borrower’s bank account using the authority of continuous payment
- However, payday loans charge a high rate of interest.
3)Lines of credit:
- The credit limit is set and payments are made through monthly instalments
- They charge a lower annual percentage rate
Applying for a short-term loan could be very useful for starting a business or for individuals in need of urgent money. For businesses, this is a good solution to resolve issues related to sudden cash flow. For individuals, these loans turn to be a reliable source of emergency funds.
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