How to Get a Cheap Short Term Loan that Meets Your Needs?
In this article, we will explain short term loans and how these loans work, features of cheap short term loans, and what you should avoid. A short term loan is one which is paid back soon after you receive it, often from your next paycheck. They are intended to be a short bridge to cover emergency expenses like a car repair, late utility bill, medical expense, and so on. These loans are often called payday loans because you pay it back on your next pay date.
Cheap Short Term Loans Usually Have the Following Features
These loans are fee-based loans. This means there is a set fee for the loan that is determined by the amount of the loan. They are not intended to be used like a credit card or more traditional loan that you pay back over time, and that has a ‘minimum’ payment amount.
If you roll over or extend your loan, the fees and penalties can be quite high, and the cost of the loan can become too much for many people with tight budgets. There are other less expensive loan alternatives including credit cards if you have one or more.
One of the best features of cheap short term loans is you can qualify for one even if you have bad credit, but meet other basic criteria, such as have a steady job, a current bank account, and so on. More than half of all people applying for cheap short term loans are approved. Check your state government website to see any limitations that may apply in your state of residence. There are states that do not allow these types of loans.
Must Read: A State-by-State Guide to Payday Loan Interest Percentages
When Should You Avoid Cheap Short Term Loans?
You should avoid cheap short term loans if you are not in an emergency cash situation and you do not want to pay a high fee for your loan. For example, a $300 loan may cost as much as $70 when you repay the loan on your next pay date. That is a lot. However, if you have three checks that will bounce, at the cost of $35 each, then the $70 fee is much less than the $105 your bank is going to charge you. You may find similar examples with a utility bill. And, if another credit is not available to you when your car breaks down, getting it fixed so you don’t miss work may be worth far more than the cost of the loan.
Get all the information you need before making a decision and never get a short term loan for casual expenses. Cheap short term loans should only be used for emergencies.
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