Short Term Cash Loans
Borrowers are sometimes in need of short term loans to bridge a temporary cash flow problem. Short term loans can be obtained from several sources, depending on need and the actual source.
The first place to look for short term loans is the bank or credit union where you do business. They may have loan packages available for regular customers in good standing, and sometimes for customers in not such good standing. The definition of “short term” may vary between financial institutions, but typically “short term” usually means a maturity date of 60 to 120 days. You may be able to get short term loans of about $1,000 to $2,000 for an interest rate slightly higher than the interest on a standard bank or credit union loan. Some banks and credit unions have put in place short term loan programs as an alternate to payday loans.
If your bank or credit union is not a viable source of short term loans, a payday loan might be for you. Payday loans are available for a period of 7 to 30 days, depending on the lender at an interest rate of $15 to $35 for every hundred dollars borrowed. Payday loans are available to anyone over the age of 18 who also meets the lenders other criteria. The cost of short term loans from payday companies makes the loans expensive and the borrower should only take out the funds absolutely necessary. Payday loans not paid back on time will result in the loan being assessed penalties and late fees, making the loans even more expensive than they normally are.
Another source of short term loans is the local pawn shop. Pawn brokers offer short term loans in exchange for an item or items equal to the amount of the loan. The customer has to be at least 18 years of age to do business with a pawn broker. Credit score is not considered when the customer has an item to exchange for a loan. The customer will have 30 days to pay back the loan back and retrieve the items or the pawn broker will offer the items for sale in the pawn shop. Pawnbrokers charge about 20% interest on the short term loans. Pawn brokers are required by law to give the customer 14 days notice before an item is offered for sale to give the customer one last chance to retrieve their item.
Most colleges and universities offer short term loans to students to cover certain expenses before student aid arrives. The loans are usually due to be repaid within the semester the money is borrowed and the interest rate usually equals the current loan rate in area banks. Most schools require the borrower be a student and enrolled in a minimum number of credit hours and have no outstanding obligations to the school except for the one that needs temporary coverage. The student has to have a fairly decent credit score or the loan may require parental consent and signature.