Are Short-term Loans Better than Other Forms of Credit?

One of the questions that are most often asked by borrowers has to do with the benefits of obtaining a short-term loans over other forms of consumer credit. Depending on the situation, short-term loans have certain benefits that credit cards and bank loans simply cannot match.

Credit Cards

Credit cards are one of the most popular forms of consumer credit in the United States, and a good percentage of the population has at least one. However, for those with less-than-perfect credit, obtaining a credit card may be next to impossible. Also, anyone who needs money in a hurry likely does not have the time to wait for a response and delivery of the card—even if they qualify. The annual percentage rate associated with most credit cards is around 18%, which is quite a bit in the grand scheme of things.

Bank Loans

Not unlike credit cards, bank loans can be difficult to procure for individuals who have bad credit or who have yet to establish a credit rating. Even if a consumer has banked with a particular institution for several years, they are unlikely to be approved for a loan without the proper credentials—including a high credit score. The interest rates associated with bank loans can be quite high; consumers who are on lower end of the credit score scale may be asked to pay as much as 36% interest over the course of the loan.

Overdraft Fees

When emergencies happen, many consumers are tempted to overdraw their checking accounts. While this is one way to resolve a financial crisis for the short-term, it is quite expensive and may reflect negatively on credit ratings. Most banks charge $30 or more for each overdrawn item as well as a $7 to $10 per day maintenance charge. Over a period of two weeks, this can really add up. Similarly, credit card loans are typically associated with a finance charge of around 25% and an annual percentage rate of more than 30%. Over the course of repayment, consumers could end up paying back double what they originally borrowed.

Short-term Loans

Short-term loans are a great alternative to credit cards and bank loans, particularly when unexpected expenses arise. The approval process is fast and easy, there are no mountains of paperwork, and no waiting the seven to 10 business days for a card to arrive in the mail. By logging on to a website like fast1500.money and entering your information, you could be approved for a short-term loan in just a few minutes and have the money you need as soon as the next business day. Lastly, the interest rates are highly competitive with other forms of consumer credit.

Anyone who has ever wondered whether a short-term loan is a great alternative to other forms of credit may be pleasantly surprised to learn the truth. With competitive interest rates and easy access, these loans are great ways to get out of financial crises unscathed.