Planning to make the next big move in your business? Short of a few bucks while buying that dream home? Don’t worry. There are loans to your rescue. But, taking loans for small amounts can get time-consuming and stressful as there are too many clauses, terms and conditions involved. There is a middle way which is the best short term loans.
Short term loans are the ones which have a repayment tenure ranging from 45 days up to one and a half year. Taking short term loans has certain benefits over regular long-term loans.
Interest Rates are Low
As per the guidelines, you have to repay the loan in a short time of say 3 months. Due to this reason, the interest rate levied on the principal amount shall be low. So, by paying only a tad bit extra, you get the chance to expand your business or build your dream home. On top of it, you might even save some money.
Credit Scores are Improved
Your credit score is a number between 300-900 which is a measurement of your credibility to pay back the borrowed amount. Short term loan lenders do not give much importance to credit scores while lending, but you can gain credit on paying them back. This can be helpful when you have to take bigger loan amounts. Hence, short term loans are the best option to improve your credit rating.
Predictability Is Simpler
It might be difficult to foresee the profit of your business or increment in your salary for a duration of 5 years but what if you have to say how much money do you have at hand by the end of next month? Simple, right? This is an advantage with short term loans. You know whether you will be able to pay back the borrowed amount at the end of the tenure or not. And accordingly, you can decide.
Approvals are Fast
Getting a long-term loan approved is a gigantic task as it involves extensive paperwork. Additionally, you need to present collaterals for security. This is not the case with short term loans. They can be availed with proofs of income, turnover of your business and years of experience.
You may avail best short term loans more than once from some banks or finance companies. They even give lower interest rates if you avail the loan from them for a second time. But, forming a habit of taking such short-term loans for luxury can be risky and is not advisable.