Exploring The Good And Bad Side Of Short Term Loans

Short term loans are like any other loans in the sense that it gives you financial aid when you need it. But they have different characteristics in line with rate of approval, requirements, amount that is dispensed as well as the interest rates and payment terms involved. A short term loan like that of an instant payday loan takes about 2 to 3 days to get approved and they are required to be resolved within 62 days. Usually, they do not amount more than $1,500. But some lenders are lenient with the amount provided there is a capacity to pay and applicants are endowed with excellent credit ratings. But those who have bad credit are often provided limited assistance and are sometimes asked to offer leverage like a post-dated check so that the lender will return once the full amount has been remunerated.

With this in mind, some folks doubt if short term loans are really a solution. Sure, there are cases wherein we need to spend more than what we have. But does it justify the availability and accessibility of such option make the financial problems go away? Or does it empower people to dig themselves deeper in debt and make them less afraid of getting a loan. 

Obviously, it’s a matter of perspective and exposure. You know what you are told and what you experience. So if you have been around people who abuse the privilege of getting short term and even long term loans, or have been abused by lenders you offer them, you will not believe it is a sound method for providing financial assistance. We can’t exclude the fact that there are sharks out there posing as reputable creditors, preying on the desperate and illiterate. But there are also trustworthy institutions that represent all the advantages of getting a short term loan – like flexibility, smaller interest rates, and convenience.

One of the things people need to realize about an instant payday loan is that, unlike debts that involve thousands on top thousands of dollars, it has a very minimal chance of going out of control. If you learn how to manage your finances when you are making them, there is very little risk that you are going to miss deadlines and get yourself into trouble. Once you accomplish a short term debt, there is also a possibility that your credit score will improve. And of course, the more you make and complete, the better your odds will be at qualifying for a long term loan.

But then again, if you are someone who is a pathological loaner or is in the habit of ignoring financial obligations, it is hard to guarantee rewards when you make a short term debt. This is probably the reason why some experts endorse financial planning first when it comes to resolving monetary crises before engaging in short term loans. For someone who is determined to get him or herself out of a rut, there are things that can be sold and expenses that can be cut to come up with the money necessary to pay bills or fund emergencies. In the end, regardless of the pros and cons, this matter is left up to a person’s better judgment. And if loans are a means to an end for him or her, then it is.