When a lender gives out money to a borrower then he charges an interest rate and makes the borrower sign an agreement that he would repay the loan on time. This amount of money that is given out by the lender is called as a loan.
Loan is a kind of debt that needs to be paid back within the specified period of time. These loans can be obtained from banks, financial institutions, or credit unions. Loans can either be long term or short term loans. The short-term loans would cover fast cash, cash advance, payday loans or instant loans. People to meet emergencies that cannot be met with the monthly income in the middle of the month often use these loans. These loans are not to meet the long-term financial plans but are meant for the immediate needs.
When taking short-term loans you should know that the interest rates and the APR vary from one state to another. The short-term loans would be given for 10-20 days to one year. The cost of the loan depends on the amount that is taken. These short-term loans can be availed by anyone like salaried people, businessmen, students, and also for retired individuals.
With the help of these short-term loans students can easily meet the cost of their books and other expenditures. There are a number of schools that provide information and forms to students who want to apply for these short-term loans. The amount of loan however would be restricted to a few hundred dollars. The repayment duration for these loans is short. For students the repayment duration for these short term loans is ideally within 90 days or at times lesser than that. The student is required to prove that he or she is enrolled in the school and should complete the requisite forms. Besides this the student is also required to promise that they would not apply for any other short-term loan till they pay off the debt on the present loan. This means that they would be able to apply for another short-term loan only when they have paid off the amount on the present loan.
As there are a number of students who fall short of money there are quite
a number of schools also that give out short-term loans with
lower interest rates. These rates are unbelievably low as compared
to the rates offered by the local banks and the other financial
institutions. The student just has to pay off the
loan amount and the interest rate accrued. However the school
would charge an administration fees on the short-term loan.
This administration fees covers the cost that is incurred with
the paperwork and the time to process the loan. It would take
a few days to get approved of the short-term loans. The time
taken for approval depends on the efficiency of the university
and the financial aid department of the school. Once the loan
is approved then it is the duty of the student to arrange for
the repayment amount.
It is preferred that you pay off the loan before the due date. Why do you want to carry the burden till the last day of the payment It is better that you pay it off as soon as you can. Remember that in case you dont pay the short-term loan on time you would have to pay penalty on the loan. The student is responsible to make payments towards the principal, interest and the penalty if any. If they fail to make payments on time then this can have an impact on their eligibility for applying for any short-term loans in the future. There are a number of students who take the help of these short-term loans to meet their expenses in college life.
Once the financial problems are taken care of the student can easily concentrate on their academics. By taking the short-term loans the students are prevented from working part-time in food joints and other places spending more of their time in arranging for money. But on the same hand meeting the payments towards these loans is also very important.
Let us compare the features of short-term and long-term
When you are in a situation where you need finance you should compare the overall situation and then decide on your options. If the funds are available for a short time of say one year or a few months then this could be the most economical option for you. When you take a long-term loan you would have to pay more interest rate and you would be paying the amount for a longer term. But if you take a short-term loan you would have to pay a lower interest rate and the loan would get over within a short period of time. Besides there are a number of lenders that would offer adjustable interest rates according to the loan term. Even if you finance your loan for a longer period of time and pay it off early you would not get back the difference in the interest that you would have saved by financing it for a short-term in the beginning.
Before you decide for short-term loans you should weigh out all your options. Keep in mind the amount that you would have to pay with the loan and read the terms and conditions of the loan carefully. Always opt for the shortest repayment term that you can even if you have to repay the amount in six months. A short-term loan can be advantageous for people who cannot qualify for a long-term loans and do not require a big finance.
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