As indicated by the name, short-term personal loans are the special financing tools designed for a short tenure. These loans are preferable ways to fund a business because they help meet those temporary scarcities. Short-term business loans are also called bridge loans as they allow small business owners to solve their short-term financial issues.
They have a repayment term of one or two years and sometimes only a few weeks. These loans also charge high fees, interest rates, and penalties.
Different types of short-term loans are there. Here we will discuss four common types of short term personal loans;
Payday loans are regarded as one of the most famous types of short term loan Malaysia. The lenders provide the highest amount of loans to the borrowers.
Lines of Credit
Lines of credit act as a business credit card that offers a long-term repayment option. They do not demand a high credit score and have an interest rate of 8 to 80%.
Merchant Cash Advances
The next on the list is merchant cash advances. It is another type of cash flow loan. This type of loan is quite expensive and can be a bit high on the pockets as the interest rate varies between 20 to 250%.
Here are a few simple steps in the process of getting a short-term loan.
Finding a Lender
First, search for lenders near you. Do all your research and get all the essential information and payment details about the lender.
Fill the Application Form
The next step is to fill the application form and submit all the desired documents.
You will need the following documents.
A short-term loan can be found at various online platforms and other places like banks, pawnshops, credit unions, and payday lenders.
Yes. You read it right. The majority of the lenders do not need a credit check, and it is possible to get a short-term loan with bad credit. However, the thing is that you need to pay high-interest rates and fees for this.
Another method that you can consult to get your loan approved is applying with a creditworthy cosigner. But only a few personal loan lenders offer this service.
Some Benefits of Short Term Personal Loan
Here are a few advantages of a short term personal loan;
Here are some of the cons of getting a short term personal loan that you need to know;
Every loan has its pros and cons. Short-term loans are playing a vital role in helping people make their businesses survive during hard times. Before applying for this short-term personal loan, make sure to do all your research and clear all your queries to avoid further complications.