Long term loans usually comprise of a lot of money and are considered during major investments like buying a house or car. They are more extensive, which explains the rigorous process of getting them approved. And they usually take longer to pay. Short term loans, on the other hand, are perfect in times when you find yourself a little hard on cash. They are available to help you survive in a short number of weeks and are expected to be paid off the following payday. Lenders often expect a set of circumstances for the acquisition of a short term loan. One of which is paying the bills.
Some folks apply for short term loans and use it to cover their bank issued checks instead. To avoid expensive NSF fees and additional penalties, they get small loans to give their accounts enough balance so it can cover the floating check that has been issued.
And then of course, there are emergency situations wherein people have to come up with additional amounts of money to cover a particular expense related to accidents or calamities. It’s hard to start over again after undergoing such a debilitating experience if you do not have enough money to sustain you during hard times. And even though you have a job to support you, the future benefits it provides will not be timely enough to get you through today. This is when a short term loan truly embodies its purpose.
One thing you always have to remember about these types of loans is that you need to have some form of payment reassurance in order to qualify. Most loaning agencies and banks would not approve of a short term loan for a person who does not have any means to return the investment. You may use other sources of income such as alimony, child support or disability payments, provided they are verifiably reliable and can be sustained for at least three years. On top of that, your credit history and rating might also be considered and there is a big chance bad credit will ruin your chances of getting a loan. But if you appeal correctly and meet all the other requirements, there is a possibility that you will walk away with a loan at the end of the day in spite of your history, only with a slightly increased interest rate and stricter payment term.