Reasons for choosing Short term loans

Reasons for choosing Short term loans

When a person is in need of loan to support a temporary personal or business capital then short term loans can be considered as a right decision. Though there might be some disadvantages, it is a valuable option, especially for the start-ups and solution to sudden financial problems of peoples and many more according their need. There are innumerable advantages of short term loans over long term loans. Here are some advantages followed below.

1. Quickly Available

One of the best defining features of this is that you can borrow them fast-sometimes within 24 hours, when you are in need of instant cash. Also it has less risk as compared to long term loans because of shorter maturity date and because of smaller amount which is borrowed for short period of time.

2. Loans are unsecured

As they are usually for smaller sums and borrowed over fewer months or years, you don’t need any asset-such as house, property or car-to be able to borrow a short term loans. Instead a decision made about whether you have someone who is willing to guarantee the loan.

3. Loans could cost less

In long term loans, the interest are more whereas in short term loans offer a simple way to borrow the cash and pay less for it-the shorter the term over which you borrow the money, the less interest you will pay. As you have not secured your valuable things such house, car and most of the times land, with short term borrowing there is also less risk of them if you are not able to make repayments. While you should be always sure that you will be able to make repayment of what will you borrow.

4. No longer term commitment

Considering with short term loans you only need to focus on the immediate future as the loan is paid within a short period of time. In long term loans peoples worry whether they will be able to make repayment with all of life going on around but that is not the case in short term loans because the repayment terms can be as short as a month, leaving you free to repay and move on with your happy life.

5. Management

In short term loans the lenders who extend short –term financing are not involved in company or business decision about capital investment. But in long term loans they are accompanied by a number of provisions, such as on the salaries of the employer of the company that restrict the business action.

6. You can use it for anything(almost)

Short term loans are lifesaver of smaller businesses. Many people use it to fill up the gap in monthly finance, to pay something urgent or to cover the cost which is unexpected but the great thing about it is that you can use them for whatever you need.

7. Plenty of choice

There are various number of short term loans which are useful. Other option includes doorsteps loans i.e. all the dealing (borrowing and making repayment) will be done face to face via a loan agent –repayment could be as little as three months. Whatever is your credit score, you are first time borrower or you don’t want to deal with mainstream lenders, there are plenty of short term loans on offer to suit your need.

Thus all the above mention reason concludes that short term loans has many advantages as compared to long term loans. It can be seen as an immediate solution of many borrowers. It is up to the borrowers to evaluate and choose the best financing method suited to their requirement at minimal cost. Once you choose the right one then you will be free from burden of finance problems.