With the economy doing poorly and banks limiting who they will loan money too, it is getting hard to get a loan in many local communities. Short term loans normally do not require any collateral, and may aid the borrower in raising their credit score. Luckily, we live in the internet age, and you can get short term loans online.
Short term loans online, are advertised as easy to get. Common requirements include that you are at least 18 years of age, a US citizen or permanent resident, have an active checking account, and depending on the lender have been employed at least one month. Approval is available in a short period of time, and you can have the money in your account within hours or about a day.
If you are in need of an extension on your loan, normally it is not a big issue to get an extension. Many of these lenders will allow you to make partial payment and extend your loan to your next payday. The ability of the lender to extend the loan is governed by the state in which you live, so you may not be able to extend the loan.
Your state has laws that are designed to protect its citizens, and based on where you live there will be limits on what you are able to borrow and at what interest rates. Because, a state regulates lending does not mean that you should not check out who you are doing business with. While a sight may say you can borrow up to $2500, a state such as Florida says you can only borrow up to $500.
When you take a short term loan, the annual percentage rate is going to be extremely high. Many people may not investigate the rate or the fees associated with the loan, because they are only planning on having the loan for a short period. These loans are commonly well never under 100 percent on an annual basis, and are easily in the 400 to 600 percent range. While investigating these loans I found in the state of Texas an eight day loan, can have an annual interest rate of 1153%. The stated percentage rate will be much lower than these numbers. How the annual percentage rate will be so high is that you may be charged a loan origination fee, in addition for every loan you will pay a certain number of dollars for every $100 you borrow.
Before deciding on a lender, decide the amount you need to borrow. Two easy mistakes to make are not borrowing enough or borrowing too much money. You need to make sure you borrow enough to insure the emergency is handled, but you do not want to have lot of excess that may temp you to go buy a new television. These types of loan should only be used for an emergency, wants and desires have no place in a short term loan.
I realize that times are hard and people are hurting, but short term loans are an expensive way to borrow money and have a great chance of making your financial situation worse. You may be better off contacting the person you owe money too, and see what arrangements they can work out with you. If you decide that you have no choice and must get a short term, shop around. Different lenders charge different fees, and most of the time it is the fees that are going to make the loan expensive.
Perhaps the most dangerous part of short term loans, is the lender is going to have access to your checking account. The part that scares me the most about these loan scenarios is that if you need an extension on the loan and the lender does not want to extend the loan they know when you are paid and can go ahead and put in for an electronic withdrawal from your account. So make sure you really need the loan and that you will be able to repay the loan as soon as it is due.
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