One can manage his/her expenses but some unwanted expenses like car repair, health problems, etc. are very difficult to manage as they are very sudden, and sometimes a person does not much have a fund to use. So, a short term personal loan is the only and the best option in these cases if you can’t borrow money from your friends and family. This lone is available to every person with a regular source of income. Unlike other loans or a traditional personal loan, these loans don’t go for several years. These loans can be paid within a week or in a few months. These types of loans are best for small emergencies. But you will get this loan based on your credit score and the lender you choose.
Short term personal loan is a lifesaver, but it comes with huge Personal loan interest rates. Compared with traditional loans interest rates are very very high.
Benefits of short term personal loans:
Fast cash: you can quickly get the amount of money you require.
These are unsecured loans as they don’t require any security or collateral. You can get your money easily.
Some short term personal loans don’t require a good credit score. You just have to have an OK credit score as long as you have a regular income.
No long-term commitment: you don’t have to commit to a single lone for a long time. Just pay it quickly and become alone free.
Flexibility: some lenders allow you to design your EMI as per your convenience.
Demerits of short term personal loan
Short term personal loan provides quick cash but with a price which is mentioned as follows :
High-interest rates: Short-term personal loans usually have higher interest rates than longer-term loans. If you take one of these loans, you may not only have to pay high payments but also a large total loan cost.
Costly fees: High fees for late payments, high processing fee, and other things can quickly add up, making your short-term personal loan costly
Not a long-term solution: a short-term personal loan can help you when you are short of short on cash, because of its cost and sometimes onerous terms, it's not a long-term solution to your financial hardships.
Short term personal loan also has some effect on your credit score. If the lender runs a hard inquiry on your profile, it can affect your credit score and it will gradually go down by a few points. And by chance, if you miss a single EMI, then your credit score will take a large hit. check Personal Loan EMI Calculator
Conclusion: short term personal loans are very helpful for emergencies but they must be used carefully
Comments