Sometimes, when an unexpected event or emergency strikes, you need money faster than the bank can give it to you.
In these situations, a short-term loan might be the best option for your needs. But not all short-term loans are created equal. The specifics of the loan, including the interest rate and time required to pay the loan back, could impact which short-term loan is right for you.
Common Short-Term Loans
Short-term loans are available to most people regardless of credit score or financial history. Some common short-term loans include:
- Cash advances/paycheck loans
- Lines of credit
- Pawn shop services
- Title loans
Title loan services are different from the others above because they require your auto title as collateral. By including collateral, title loans are more secure for the lender and, depending on your specific circumstances, you can get better terms for your short-term loan.
Benefits of Short-Term Loans
According to Fundera, short-term loans have advantages relative to other short-term funding options.
Benefits of short-term loans include:
- Set payment structure
- Limited paperwork
- Quick access to cash
- Available to small business owners with lower personal credit scores
- Suitable for a wide range of expenses
Short term loans aren’t for everyone. But if you’re in a situation where you need immediate funds and you have the means to repay them in a timely manner, this could be the right solution for you.
Best Short-Term Loan Length
One of the frustrating aspects of short-term loans is just that — they’re short. Lenders with less-than-stellar integrity can use short loan lengths and high interest rates to prey upon customers in difficult financial positions.
At California Auto Finance, we believe that the best short-term loan length is the one you can pay back. That’s why we work with our customers to develop a payment plan that’s right for you — even if it means a 24-36-month timespan for the length of the loan.