Loans have become the need of the hour with the changing times. Since the onset of the 21st century the demand for loans has come to an all-time rise and as the time is progressing this demand is becoming higher and higher for short-term loans. The loan procedure is nothing new in our society. From time unmemorable the basic business of profit was lending money to small and medium enterprises by rich businessmen or merchants who would then charge processing money and interest on the principal amount. This is a process in which the merchants had a monopoly over others and the interest rates charged by them caused more Missy and trouble. After the banking system, the interest rates were regulated and proper procedure was set up to sanction loans to the customers.
The banks have become very rigid on granting loans to the individuals. Though the access to loan facilities have opened up to all the segments of the society and anyone can freely approach any bank for money. The banks have become careful in granting the loan and now go through a rigorous process to check each and every legality before sanctioning the loan amount. Some of the banks even go on to hire third-party agencies to look into the credit score of the individuals and cross verify them with the credit score quoted by the applicant. A thorough background check is also performed before granting loans to check the repayment options. The people who apply for the loan and have bad credit associated with their name are the worst affected as the banks do not give them any loan and blatantly deny from accessing other benefits on their bad credit score. Short term loans are the best option for these people.
What is credit score?
Credit score of a person is a cumulative assessment of that person’s transactions and bank account details. It measures the bank account transactions, assets, liabilities, loans and the record of the person in maintaining these things. There is a false conception in the minds of people that those who have a huge amount of loan on their heads, cannot apply for a fresh loan because of a bad credit score. It basically the opposite because while calculating the credit score it is not seen whether how much liabilities are being carried by that person but is he actually able to carry those liabilities or pay them off, is seen. Thus maintaining a good credit score is very important.
Short term loans online
The short-term loans online are the best option for the people who are working professionals and do not have time spare on the long queues and documentation can apply for these loans. These loans are easily granted without much hassle and unwanted gas which usually a customer has to face when he/she approaches a public sector bank. The best feature is that these can be applied online without approaching the lender and the loan is delivered in a very short time period within two to three days. The amount can be easily returned with easy monthly instalments and by paying the nominal interest on the principal amount.
Features of the short term loans
The short-term loans have the various feature added to it which puts it way ahead than other conventional loan granting institutions.
- You can apply for short term or payday loans as an individual or as a business.
- The short-term loans granting firms do not evaluate the application on the credit score basis and hence there is a high chance of people scoring loans who do not have a very good credit score.
- There is a minimum amount of paperwork involved and hence applying for a loan is very much easy as compared to the process which is prevalent in the banks.
- The approval of these loan does not require any specific approval or documentation and does it gets approved in one day.
- They are be secured.
Interest rates on short-term loans.
The interest on the short-term loan varies from company to company and is set up by them. The interest on the loan is high when you take a loan for a short period. The duration is inversely proportional to the interest rates charged. The more the time period the lesser is the interest rate is charged and the smaller the time period is set for the repayment of the loan the larger is the interest and instalments you have to pay.
Repayment of short term loans
The repayment of short-term loan can be made by various payment options available in the market. Usually, the emphasis is laid on paying the loan on the first or second day of your salary and hence these are also referred to as payday loans. There is always a notion in the minds of the young or new borrower’s about the late fees. Most of the firms which grant payday loans do not charge exclusively for late fees but give an extension to pay the instalment in the next few days if you ever miss the deadline.