4 Benefits of Short-Term Loans
When considering getting a loan there are several variables to consider, which can be anything from the size of the loan, or the length of time you prefer to have in order to repay it. Long-term loans mean lower monthly payments, but you end up paying a higher amount of interest in the long run. Short-term loans have higher payments monthly, but you are going to be paying back significantly less when all is said and done.
It’s important that you consider your current financial position in order to determine which is the better option for you. While a case can be made for benefits on each side of the equation, this article is going to be focusing on short-term loans and the positive points that they have.
The following are the key benefits to short-term loans:
1. Less and Lower Interest[caption id="attachment_277" align="alignnone" width="900"] Piggybank and money tower on white background[/caption]
Short-term loans, in the area of borrowing money, are going to be the option that keeps the expense of interest down. On account of having to pay more money monthly it gives the loan itself less time to generate interest. In some circumstances the interest rates of short-term loans can be lower as well.
2. Safer Planning[caption id="attachment_276" align="alignnone" width="640"] income concept. businessman counting cash money, calculator, wallet with cash and coins, credit card, pen on blue background. Vector illustration in flat design[/caption]
When putting together a loan it’s fairly easy to plan in the near future how you are going to be financially. If you have a steady job that appears to have lots of opportunity to move up you can normally make some safe assumptions inside of a certain time window. When you work with long-term loans that span over 20-30 years there is the challenge that there is no of predicting that far ahead.At that point in time the economy could be in a very problematic situation where making sure those payments get covered could suddenly become a real problem.
It’s also safe to say that short-term loans grant that additional comfort zone that helps keep your stress in check and lets you handle what’s directly in front of you in the moment, as opposed to worrying about what the future could or couldn’t be.
3. Credit Benefits
If you are in need of a credit score boost paying off a short-term loan is an excellent way to get those numbers in a better place.
4. Less Time to Process
Long-term loans tend to have a longer processing time, which makes a situation far more difficult should you need the money sooner than later. In addition to the difference of speed, there is the added benefit that there are occasions that no form of collateral is necessary to have a short-term loan processed and approved.
When getting yourself into a position where you are taking money as a loan it’s incredibly important to research exactly what you are getting yourself into. Consider the interest, penalties of payment defaults, and other variables of a similar nature so that you can make a decision on which approach is best for you. If all of the above sounds like something that appeals most to you then it looks like the choice has already been made. Check out Lendgreen if you would like to learn more information.