A short-term personal loan is technically a loan that is repaid within a year. However, the majority of short-term personal loans are small loans that are repaid within a matter of weeks.
Do you hate the feeling of having debt hanging over you? So does everyone else! No one likes having debt. Debt can be extremely stressful to pay off and it can be overwhelming trying to manage multiple types of debt, like your car payments and credit cards. However, debt might not be something that you can necessarily avoid. Accidents, emergencies, and other unexpected expenses can catch you off guard and you may need to take out debt to cover the costs. If you are someone who likes to pay their debt off as soon as possible, a short-term personal loan is a great way to have access to money without needing to have your payments looming over you for a long time.
A short-term personal loan is a loan that is repaid over the course of a year at the most. Short-term personal loans can be used for a variety of purposes and can range from $25 to a few hundred dollars, to thousands of dollars. Typically, short-term personal loans tend to be for less money and are paid back much sooner than a year, usually over the course of a few weeks or months.
A short-term personal loan will tend to be an unsecured loan. This means that you will not need to put up collateral for the loan. For example, if you got a secured auto loan you would need to put your car up for collateral. If you got an unsecured auto loan you would not need to. If you defaulted on your unsecured loan, you would not lose your car like you would for a secured auto loan. This can be a positive and a negative. Not having to put up collateral can be very helpful and make loans safer for customers, but they may result in higher interest rates on your loan.
The type of personal loan will depend on how much money you need, and what your creditworthiness looks like. Institutions like banks and credit unions are usually the lenders that offer larger personal loans that are paid back over a longer period of time. These loans will have very rigid repayment terms and will likely be harder to get approved. Banks and credit unions like to see their borrowers have very high credit scores and overall good creditworthiness. Other lenders like online lenders will vary much more in loan size and repayment terms, such as an unsecured personal loan. Generally, these loans will have less strict standards for borrowers when it comes to credit scores and credit history. Lastly, lenders like payday loan lenders will offer small loans up to about $500. These loans are generally repaid in one week or so and are widely available to people with poor credit. Their interest rates can be very high and many of the lenders are untrustworthy.
Yes, you can get a short-term loan if you have bad credit. In reality, short-term loans are some of the most common loans for bad credit and may even be the only loan you can get with bad credit. However, keep in mind that not every short-term loan lender will approve your loan even if you have bad credit.
Again, lenders like banks and credit unions will likely not approve your loan if you have bad credit. Institutions like these have very strict qualifications for their lenders. A lower credit score means higher risk for banks and credit unions, which are arguably the most risk-averse institutions. Because they tend to avoid risks, they will have higher thresholds that borrowers must meet to get their loans. If you have bad credit, you can pretty well assume you will not be able to get a short-term personal loan at a bank or credit union.
Like we mentioned earlier, short-term lenders like payday loan lenders offer loans for people with bad credit. If you have bad credit, lenders like these are some of the only few lenders that you may be able to borrow from. You will likely not have access to larger loans and will have to settle for loans around or smaller than $500. Since these lenders offer small, short-term loans, they are willing to take risks with their borrowers. As such, they allow borrowers to get their loans if they have bad credit. However, this also means that these loans will have higher interest rates and can make your weekly or monthly payments relatively expensive. Also, while some short-term lenders like Possible have loans that can build your credit when you pay them back, the majority of these short-term loans build zero fugure value for you and can even put you further into debt at the same time.
Short-term loans work by lenders approving your loan application and then coming to an agreement on loan terms with the borrower. Once this is settled, the loan must be repaid by the borrower exactly how the loan terms laid it out to be. If you are a borrower and your loan terms write that your loan will be repaid in 2 weeks, you need to pay it back in that time frame or you may find additional fees tacked on or your credit score has taken a huge knock.
As a borrower, the short term loan process looks like this:
Like we have mentioned, there are many types of short-term loans that vary in loan amount, the time you need to pay them back in, interest rate, and credit you need to get the loan. Here are some of the more common types of short-term personal loans.
There are so many types of short-term loans and so many lenders that offer them, that it can be difficult to know if you should get one or not. To make your decision easier for you, we compiled some of the advantages and disadvantages with short-term loans. Here they are.
Here at Possible, we feel like we have created the perfect product for people who need money and need to boost their credit score. We have created a short-term loan that is much easier to pay back than traditional payday loans, and is cheaper as well.
Our loans can be up to $500. They are paid back over four equal installments. If you are struggling to make a payment with our loan, you can push back your loan payment up to 29 days, right within our app. We offer our loans to those with poor credit, and you can have your money within the hour after it is approved, or even sooner! Our APR is extremely competitive, which will result in you paying less money than you would with other lenders, especially payday lenders. In addition, the fees are all upfront and transparent, unlike the subscription fees, tips, and other charges many payday advance apps might have.
We understand that the world is not fair. We truly feel for the people who have been consistently taken advantage of by financial institutions, and are left with a poor credit score and nowhere to turn but payday lenders. We built Possible to fight these financial injustices. We seek to build value for our customers by providing them with a product that builds credit for them so they can get back on their feet.
If you would like to get a short-term personal loan with Possible, download our app today and get started!