Five Ways to Achieve a Short Term Loan

Bridging LoanWhether it is to fix a tire, a plumbing problem or any other minor emergency, many people find themselves strapped for cash and unsure where to turn. Some will look to short term loans to help them out in a pinch. When navigating smaller loans, here are some of the basics you should know about the different options available.

1. Payday Loans

Payday loans are a popular place to turn to when you have pressing expenses that will not wait until your next paycheck arrives. There are a few different places to go for a loan until your next check comes. Many different private lending companies specialize in payday loans. Sometimes, your employer may even be able to offer an advance on your next paycheck. And now, an increasing number of banks are jumping in on the action offering their own forms of a payday advance.

2. Private Lenders and Personal Loans

Some of the same companies, like InstaLoan, that extend payday loans also provide short term lending options like signature loans. A signature loan is a personal loan which is unsecured. Unsecured refers to the fact that it is not backed up by personal equity from a home or auto. Thus, the lender will not be able to collect a personal asset or property if the loan is defaulted upon. But since this means higher risk for the lender, it usually incurs a higher interest rate.

3. Title Loans

Title loans are secured because they lend money against the asset of your auto title. Car title loans are also available from lots of short term loan companies. They should be handled carefully because, as with any short term loan, they must be paid back within a small time frame of a few weeks and will quickly rack up high interest rates. If not used correctly, people can end up owing more than their car might be worth.

4. Pawn Shops

Pawn shops have been around for years and are an old way of earning some extra cash based on an antique, jewelry or other asset you have sitting around the house. Pawn shops work when people bring in a valuable item and ask for an appraisal. They are then able to take a loan out for the item’s worth or at least a percentage of the item’s estimated value. There will be a time frame in which the borrower can pay back the loan with interest. If the time is exceeded, then the pawn broker has the right to sell the item for profit to recoup the loan.

5. Family Lending

Perhaps the safest type of loan is a short term contract which you draw up with a willing family member or friend. This lending should also be approached with caution as a bad loan situation can ruin a relationship and won’t be worth it. But if both sides feel comfortable about the loan, then you can write up your own agreement. This is a safer way to borrow as you will not suffer from such high interest rates. However, it is still borrowing and should be taken seriously with intent to pay back on time.

With these tips, you can choose the best method for a short term loan.

 

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