Surprise expenses like to occur when we don’t have extra money. It’s easy to panic in these situations, but there is a practical solution if you need cash for a home repair, a car repair or a medical expense.
Some people rely on their credit cards to get through emergencies. But given high credit card rates, others prefer low-rate personal loans offered by banks and credit unions.
In theory, a personal loan can provide the funds you need. However, after applying for a loan, you may discover strict financing requirements. Banks are particular and they don’t give loans to everyone.
You may not qualify for a bank loan, but this doesn’t mean you can’t qualify for other types of personal loans. The truth is, if you need immediate cash and you can’t get a bank loan, a short-term personal loan through a lending company can be a lifesaver.
Cash advances and payday loans are classified as risky loans because of their short terms and high finance fees. With any type of financing, the trick is responsible use. There are ways to keep loan fees manageable; and due to new flexible lending terms, some lending companies offer longer long terms.
Short-term loans are typically due in full within 14 days, or by your next paycheck. These terms are doable for some, yet others have trouble repaying a loan in two weeks. Lenders understand this problem; and to keep short-term loans easily accessible, some offer extended due dates.
Here are four things you can expect from a longer term loan.
Flexible due dates
You can still repay your loan within two weeks. Its always beneficial to settle a balance sooner rather than later. But if there’s the option to extend your due date an additional two weeks, or the option to repay the loan over several months, you don’t have to worry about late fees if you need extra time.
Expect higher fees
A longer term is helpful if you can’t repay funds within 14 days. Just know that longer terms come with additional interest. Make sure that you understand all fees before accepting funds. To reduce your loan fees, only borrow what you need to cover your emergency expense, and pay off your loan early, if possible.
Use funds for any purpose
If you apply for a personal loan through a bank, the bank or credit union will inquire about your plans for funds. This is not the case when you apply for a payday or cash advance loan. These lenders only care about your ability to repay funds. Therefore, you can use the cash for any purpose, such as a car repair, utility bills, etc.
Faster loan approvals
Between credit checks and income verifications, it can take days to get approved for a bank loan. This is problematic if you need cash today. Getting a longer term loan through a lending company is a faster, smoother process. Since there are no credit checks or collateral, you can receive a response within an hour of submitting your application.
