While some of the most well-known loan types are for large
amounts of money and are repaid over several years (such as
mortgages and automotive financing loans), there are a variety
of loans that are designed for smaller amounts and for shorter
periods of time. Some of these loans come from banks or other
common lenders, whereas others come from specialty lenders that
deal specifically with these types of short-term loans.
If you're in the market for one of these shorter-term loans, or
if you're just wanting to see exactly what options are
available, then the information presented in this article is for
you.
Below you'll find information on the short-term loans that are
commonly offered by traditional lenders such as banks, as well
as other common types of lenders and a few specialty lenders
that aren't as common but that deal almost exclusively in
short-term loans.
Traditional Lenders
While many people think of traditional lenders such as banks as
the source for larger loans like mortgages and finance loans,
most of them also offer a wide variety of short-term loans for
smaller purchases or temporary financial needs. These loans can
be either secured or unsecured depending upon what the loan will
be used for and the credit history of the borrower, though the
secured loans tend to carry with them somewhat lower interest
rates than the unsecured loans.
Most short-term loans of this type are for a period of six
months, though some will last for nine months or a full year
depending upon their use, the amount borrowed, and the options
presented by the bank or financial institution.
Other Common Lenders
In addition to the short-term loans that are offered by banks
and other traditional lenders, there are a variety of short-term
loans that are available from common non-traditional lenders
such as finance companies, loan offices, and online lenders.
These loans tend to share much in common with the short-term
loan offerings of banks, though more often than not the loans
offered by these non-traditional lenders are only offered as
secured loans. The interest rates on these loans can vary from
lender to lender, and may be higher or lower than those offered
by banks and traditional lenders.
Specialty Lenders
Some specialty lenders also exist, offering short-term loans to
individuals that might not be able to get the loans elsewhere.
Often these lenders require very specific collateral to secure
the loans, such as car titles or other items of value, and may
not offer the best interest rates that you might be able to find
for that particular loan. The advantage of these lenders is that
they often process the loans quickly and you can get the money
that you need the same day as the loan application. These loans
are usually six-month loans, though some are one year loans.
Choosing the Loan that's Right for You In order to choose the
loan that's right for you and your needs, it's important to shop
around and compare the loan rates and terms of various lenders.
In order to do this, you should take the time to request quotes
from the different lenders that you're considering, and then
compare the quotes to each other so that you can decide which
loan offer is the best one for your needs.
Compare the quotes based upon the interest charged, the
collateral (if any) that's required for the loan, and the
repayment terms and amount of time that you have to make all of
the payments. This way you can decide which loan is best for you
and your needs.
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