There are any number of different reasons why you might find yourself in dire financial straits. There’s no shame in it, though. Even the most fiscally responsible among us can run into financial difficulty due to unforeseen circumstances. If you do, you may want to look into short-term loans to help get you through this rough patch and back on track.
1. Traditional Short-Term Loans
Traditional short-term loans are reasonably straightforward. You borrow money as you would with any loan with the understanding that your window for paying back that loan is shorter than it would typically be for a long-term loan. That’s because short-term loans typically feature lower interest rates.
This is something else you’ll want to consider when determining which short-term loan is right for you: How much are you willing to pay in the short term as a trade-off for lower interest rates?
In addition, you’ll also want to make sure that your needs really are short-term. Taking out a short-term loan to cover long-term needs simply won’t cut it.
You’ll run out of money and then not only will you need to seek a new loan, but you will have to do so while or right after you pay back the first one.
2. A Payday Loan
Some people opt for the convenience of payday loans instead of a traditional loan. These types of loans are just how they sound — loans designed to get you to payday, at which point you’ll pay them back.
That said, while there is nothing inherently wrong with that concept, the windows for paying back payday loan firms are often notoriously tight and unforgiving if you miss or fall behind payments.
You’ll want to make sure you are absolutely certain that you can pay back your payday loan firm with ease before signing on.
3. Invoice Financing
This is a type of loan that is designed more for small business owners who fall behind yet don’t want to resort to a traditional short-term business loan. With invoice financing, you receive invoices for repayments and your creditor receives copies of your business invoices.
When you get paid, they freeze payment to you until you pay your installment on the loan with interest. If you are confident of your ability to maintain a consistent cash flow, this can be a good way of operating in a “business as usual” fashion while still paying off your loan.
4. A Title Loan
Title loans can be quick and painless as long as you know what’s involved. Essentially, your lender puts a lien on your car as security and then you pay back the short-term loan as you go. You can even continue using your car while you pay off the debt.
As long as you are sure that you can pay off the debt, this can be an easy way to get a short-term loan quickly without having to deal with the full process of getting one from the bank.
Managed properly and responsibility, a short-term loan can help Americans in need get their financial affairs back in order.