Choosing the best short term loan requires you to weigh all the pros and cons. These lenders have lower credit score requirements than traditional banks, and their approval and funding times are faster too.
They also tend to charge higher interest rates and fees, so they can become expensive debt. Fortunately, some lenders offer more reasonable rates and don’t charge prepayment penalties.
1. Low minimum APR
If you are in a financial pinch, a short-term loan is a good option. These loans typically offer lower rates than long-term personal loans, and you can often receive your funds quickly. They can also help you improve your credit score if used responsibly.
However, it’s important to shop around for the best rates. Many lenders offer different APRs, terms and loan amounts emergency loans , and some charge extra fees such as origination fees or prepayment penalties. It’s also a good idea to check out a lender’s BBB rating.
You can find a number of lenders offering short-term loans online. These include banks, credit unions and nonbank lenders like online marketplaces and peer-to-peer lending companies. Nonbank lenders often offer more flexible eligibility requirements and a faster approval process. In addition, some online marketplaces allow borrowers to compare offers from multiple lenders and choose the best option for their needs.
In general, a short-term loan is less expensive than a payday or auto title loan and has more repayment options. However, it is still a high-cost form of borrowing, and you should carefully consider whether it’s the right solution for your needs. Also, short-term loans can be difficult to pay off if you lose your job or face other unexpected expenses. That’s why it’s important to borrow only what you can afford to repay in a timely manner.
2. Fast funding
The best short term loans offer fast funding, which can be helpful if you’re running a business and need money in a hurry. You can also find lenders that offer a variety of loan amounts and terms to meet your needs, as well as low minimum APRs and fees. Some of the best short-term loans have streamlined application processes, which make it easier for smaller businesses to get approved and funded. Finally, many short-term loan providers don’t require collateral, which can be a plus for small businesses that lack significant assets.
One of the top short-term loan companies is Avant, which offers loans to borrowers with credit scores as low as 580 and can provide funds within a day of approval. The company has a competitive interest rate, flexible terms, and high user satisfaction ratings. Another top lender is Upgrade, which offers loans to borrowers with fair credit and provides quick funding, although it charges an administration fee of 9.99%.
Choosing a short-term loan requires careful consideration, as not all lenders are created equal. The best short-term loan companies have a low minimum APR, a fast turnaround time, and no penalties for paying off your loan early. They also have a simple online application and flexible repayment schedules. You can use the WalletHub free prequalification tool to see which lenders may approve you and what rates they offer before you apply.
3. No penalties for paying off your loan early
When you apply for a short term loan, the lender will typically run a credit check to determine if you qualify. The exact results vary based on the type of loan and the lender, but can range from a simple credit pull to an extensive and detailed review.
While it is possible to get a short term loan without having good credit, you will likely pay a much higher rate of interest. You should consider other options if you have bad credit, and you are interested in getting a short-term loan.
You can apply for short-term loans from a variety of lenders, including financial institutions like banks and credit unions, payday or check advance lenders, and pawn shop loan providers. Each offers a slightly different set of terms, fees, and repayment schedules. The amount you can borrow also varies by lender.
Some lenders have very stringent eligibility requirements for borrowers, while others require no minimum credit score. It’s best to apply for a short-term loan with a lender that has flexible eligibility criteria and a fast application process, especially if you have bad credit. A fast approval timeline means you can have money in your bank account faster, which is helpful if you need it urgently. Also, look for a lender that doesn’t charge prepayment penalties. This can save you a lot of money in the long run.