Short-term loans are a popular type of credit issued for 30-90 days. The main feature of these services is a relatively small limit on funds. Such deals are issued extremely quickly. As a rule, financial institutions accept applications online guaranteeing instant decision-making and giving out money within 24 hours.
Key Features of This Type of Lending
Money for a limited period is usually required to cover current needs and urgent expenses. It is about paying for services or acquiring relatively inexpensive goods, including household appliances, medicines, furniture, and portable devices. One may also click here for more information about the terms and conditions of this lending.
The advantages of short-term credits are:
- Prompt clearance;
- The decrease in the overpayment level;
- Flexible terms of cooperation;
- Lack of strict requirements for borrowers.
A short-term loan will ensure a reduction in interest payments for the use of taken funds. The available limit depends on the level of income. If the institution refuses to assess solvency, only a fixed amount can be received.
Where to Get a Short-term Credit?
At the preparatory stage of lending, the target of the funds use is determined by the debtor. Financial institutions provide money for any need and do not impose restrictions recommending only to refuse using loans before repaying the previous ones. Careful planning will allow them to rationally distribute credit money and personal savings. As a result, financially conscious citizens reduce the risk of late payments. It is recommended that the cost of repaying a future debt should not exceed 40% of the client’s monthly earnings.
Short-term loans are issued by:
- banking institutions;
- microfinance organizations;
- private investors;
- electronic payment systems.
Express Lending in MFIs
Microfinance companies provide quick loans for up to 30 days. Some organizations even offer regular customers to increase the term of the transaction. In this case, the duration of the deal can reach six months. However, the minimum term of a transaction is usually limited to 3-7 days.
The advantages of lending in MFIs are:
- Minimum requirements for the borrower;
- Opportunity to get the first loan for free (depends on the institution);
- Payout of funds within half an hour.
It should be noted that the available amount of money is significantly restricted. In the application, it is enough to indicate ID data and contact details. Microfinance companies usually refuse to score the candidates, so the likelihood of approval is approximately 85%.
Summing up, the potential customer has the right to receive short-term credit from any bank, MFI or pawnshop. Before taking a loan, you need to evaluate the pros and cons of the organization that provide moneylending. Please note that these forms of financing are only suitable for customers who urgently need money. It will be possible to reduce monthly payments and interest rates on loans for a period of not more than one year only by providing income statements and other documents. So, take your time to learn the best conditions you can get.