Short term loans are one of the most common types of loans that people attain. You can see the examples of short term loans all around you anytime.For example, borrowing from a friend, credit cards, borrowing from a shop etc. Short term loans make life smoother due to their wide and less complicated availability. Money Lender, banks etc. keep coming up with new and innovative plans for providing short-term loans. These loans can be taken for a time period of less than a year and can also be taken for a month or until your next payday comes.
Mentioned below are common types of short term loans that are availed by the masses-
- Credit cards
Perhaps the most common type of short-term loan on this list is the credit card system. Under this system, the borrower has a card that contains digital money according to a pre-defined limit. This money can be spent without hassle even if you don’t have cash and you will have to pay the money next month when the bill is issued. This can be used for emergencies where you don’t have much time to visit banks.
- Payday loans
This is another common type of short-term credit taken by people. Suppose your payday is a few days away and you require money immediately due to some emergency, then these loans can help you to fulfill your need by giving you the required money, which you will have to pay on your upcoming payday.
- Merchant cash advances
This is actually a cash advance but acts just like typical loans. Under this, the lenders loan the desired amount to borrower, the borrower pays the lender by allowing him to access his credit facilities. Everytime the borrower makes a sale some part of it will go to the lender.
Advantages of short-term credit
Short term credits provide a lot of advantages for the end users. Some of them are listed below-
- Low overall interests
As the loan is just for a short period of time, the overall interest amount that you have to pay is considerably low. It’s a win-win situation for both the money lender Singapore and the borrowers.
- Ease to acquire
These loans are pretty easy to acquire and don’t involve a background and credit score check. They can be attained easily in a few hours only as the requirements for the loans aren’t tough to attain.