How to Find the Best Short-Term Loans


If you're on the hunt for the best short-term loans, it's important that you take the time to understand all your options before settling with one offer. Whether you're investing in your business or need one for personal reasons, a short-term loan can be beneficial for quick settlements without building up debt.

In this article, we'll explore what short-term loans are and what you need to look for when finding the best one for your needs.

What is a Short-Term Loan?

Short-term loans are similar to regular loans, but with the key differentiator of having a short repayment schedule. While regular loans have the option to be repaid in 30 years, short-term loans must be repaid in a shorter amount of time, ranging from 90 days to 15 years.

These types of loans are ideal for businesses for a number of reasons, including:

  • Resolving cash flow
  • Seasonal trends of inventory and staffing
  • Expansions in physical location or product lines
  • Personal or commercial emergencies

How to Compare Short-Term Loans

Before you sign up for a short-term loan make sure you understand the key features that differentiate each offer from one another to help you choose the one that's right for you.

Pay Attention to Interest Rates

Interest rates fluctuate all the time, and this rate determines the total amount you'll have to pay back for the loan. So as you shop for a public or private loaner, be sure to compare the interest rates of the ones you learn about.

Watch Out for Hidden Fees

As you note the interest rate a financial institution or lender is offering on the loan, also be sure to pay attention to any hidden fees that may not be explicitly stated, but found in the small print of the contract. These fees include, but aren't limited to:

  • Origination
  • Underwriting
  • Appraisal
  • Administration
  • Credit report
  • Processing

Know When You Have to Repay the Loan

Even with short-term loans, there is such a thing as paying the loan too early. In fact, some institutions may charge a "prepayment penalty" for doing it earlier than negotiated. So be sure you and your loaner agree on the same repayment schedule to avoid any early or late payment penalties.

Be Sure a Short-Term Loan is Right for You

There are many different types of loans available, so be sure that a short-term loan is indeed the type of loan you need. Check your credit score to learn about the types of loans you qualify for and from which loaner you can get it from.

Choose the Right Short-Term Loan for You

No matter your reason for the loan, the key to finding the best short term loan is by fully understanding your current financial state and knowing that you can indeed repay the loan within the short repayment period.

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Sources:

Laws: http://loans.laws.com/short-term-loans
Intuit QuickBooks: http://quickbooks.intuit.com/r/loans/when-and-how-to-use-short-term-loans-for-your-small-business/#sm.0006rctm21ozdur11xa2r42t3taso
AllBusiness: https://www.allbusiness.com/top-5-things-to-consider-before-applying-for-a-loan-93874-1.html

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