3 Types of Short-Term Personal Loans
In 2021, almost 20% of Americans didn’t save any money, and 25% don’t have any emergency funds. If you’re one of these people, then a random life event can easily bankrupt you.
Thankfully, there are personal loans available to help you with major financial decisions. Even better is, there are short-term loans that can tide you over in a pinch.
Of course, you shouldn’t use these often, as they’re usually tied to high interest rates. But knowing what’s available before you hit a financial snag can be a lifesaver.
Read on for 3 types of short-term personal loans you can consider.
1. Lines of Credit
Chances are, you’ve got a credit card or two in your wallet. You can always choose to charge emergency expenses to them.
However, a better idea is to sign up for a new credit card, as many have introductory interest rates of 0%. So long as you pay off your debt quickly, you won’t have to pay any interest at all!
The downside to getting a new credit card is it can take a while to get approved and receive your card. But compared to other short-term personal loans, the regular interest rates are reasonable.
Make sure to make payments on time. Otherwise, your credit score will fall and interest rates will increase.
2. Cash Advances
Another thing you can do with your credit cards is get cash advances. Basically, you’d use your credit card like a debit card; go to an ATM, then punch in what amount you want. You’ll instantly get cash!
This can be handy if you need money immediately. But do note that there are caps to how much you can get daily (most companies limit it to a couple of thousand dollars).
Also, the interest rates and fees for cash advances can be quite high. Pay off your cash quickly to avoid hurting your credit score.
3. Payday Loans
If you’re currently employed but can’t wait for your next paycheck, then you should consider payday loans. You can get approval for one within minutes, which is handy when you need to pay something off now.
However, do note that these have insanely high interest rates. In fact, it’s common to see 3-digit numbers!
Make sure to pay off payday loans ASAP. This is usually done by deducting from your next paycheck, so try to refrain from borrowing over the amount you’re usually paid.
View this page for more information if you’re interested in taking out payday loans.
Choose From These Short-Term Personal Loans
Short-term personal loans can save you in an instant with their quick approval times. But because they usually have high interest rates, it’s best to avoid taking them out unless it’s necessary.
Instead, you should focus on building your savings account. That way, you’ll be prepared, despite whatever life throws at you.
To learn more about maintaining your financial health, keep browsing our blog page now.