What is a Short-Term Loan?
Short-term loans are available through a variety of different lenders including banks, colleges and payday loan companies. Short-term loan options differ from long-term loan options in that they are due within a shorter amount of time. Many lenders have unique repayment terms, and repayment timing can vary. The two main types of short-term loans are payday loans and short-term installment loans.
Short-Term Payday Loans
Borrowers can receive a payday loan online or from stores located around the country. These loans are unsecured, high-interest loans that are lent at a fixed-interest rate of around 400%**. However, unlike short-term installment loans like Great Plains Lending, the repayment schedule for payday loans is strict and can incur significant fees if the loan is not paid in full by the borrower's next paycheck.
Short-Term Installment Loans
These types of loans can be extremely helpful to individuals who are in need of funds quickly, but may not be able to pay back the loan in full by the customer's next pay day. Great Plains Lending offers short-term installment loans with more flexible payback options, including minimum payments and no fees for early pay-off.
Benefits of a Short-Term Loan
These types of loans like a Great Plains Lending loan can be extremely helpful to individuals who are in need of funds quickly. These loans are typically delivered by the next business day, allowing the borrower access to emergency cash in a tight situation. However, this also means that these types of loans should be avoided if a borrower needs long-term financing such as a car loan.
Risks Associated with a Short-Term Loan
Because short-term loans generally have higher interest rates than more traditional loans, they should only be withdrawn in emergency situations where fast cash is necessary. Although the repayment periods are shorter to encourage a quicker payoff of the loan, the interest rate for each pay period is high, so you need to take this in to account when planning your budget to pay off the loan.
Is a Short-Term Loan Right for You?
Life is unpredictable. If you need relief from unexpected or emergency expenses quickly, a short-term loan from a direct lender may be right for you. When you are shopping for the best loan options, make sure to do your research and read all fine print to look for hidden charges and fees. Different lenders have different repayment terms and fees. With Great Plains Lending, our personal loan has no prepayment fee, no application fee, and interest only for the amount of time you have the loan. As you're evaluating the different types of short-term loan options, don't hesitate to give our Great Plains Lending customer service team a call. We're happy to answer any questions you may have:
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