Instant short term loans are a small loan with a repayment plan that typically ranges from a few days to about a year. These loans can be obtained from friends or family members, pawn shops, or specialized short-term lenders (either at physical locations or online). One of the more common types of short-term loan, payday loans, have high interest rates that can exceed 350 percent and strict repayment policies, and are a target for state regulation due to their unfair practices. Payday loans should only be an option as a last resort, because they are much easier to obtain than a traditional bank loan. As a part of financial wellness benefits, short-term business loans are a little different, as they are a bit larger and are paid back over a slightly longer period of time.
Instant short term loans can be a great option for people who don’t qualify for a regular bank loan. They offer flexible repayment structures and lower interest rates for the borrower. However, things can get messy if the loan is not organized through a loan agreement and repaid on time. Another concern is the fact that your personal relationship with the person may be at risk if you default on the loan. Be sure to recognize before borrowing that you are just as responsible for paying back this instant short term loans as you would be with a bank loan. Start by approaching a potential lender with a clear idea of how much you need and how quickly you can repay the loan.
This will help the lender establish their expectations for being repaid. Don’t inflate your ability to repay the loan just to get the money; if you can only realistically pay $200 per month, don’t say you can pay $400. This will just lead to strife between you and the borrower down the road. Also, make sure the lender knows how long it will take you to repay the loan in full. As a safeguard for both you and the lender, you should draft a loan agreement that spells out the terms of the loan. This “promissory note” is a contract that shows identifying information for you and the lender (names and addresses), important dates like the start date and repayment dates, the total amount loaned, and each individual payment amount. It’s best to use a pre-made template so that your contract is more legally-binding and accurate.
These templates are available online for a small fee from several websites. Pawnshops offer simple, collateralized loans to borrowers. The loans are collateralized, meaning secured with a possession, when the borrower provides a valuable possession to the pawnbroker in exchange for the loan. If the loan is repaid under the contract terms, the item is returned to the borrower. If the borrower fails to repay the loan, the pawnbroker keeps the items and sells them to regain his loss from the loan. Pawnbroker loans offer a number of advantages.