A loan scheduled to be paid back in a time-line that is less than a year, and then the loan is called a short-term loan. This is useful for businesses or individuals who don’t qualify for a line of credit from the bank. They can get the money in the form of a short-term or one-time loan to finance the temporary needs of the business. Sometimes these short term loans change the entire direction of the business.
How to Choose the Best Short-Term Loan Vendor?
Even though many people believe that all the short-term loan lenders are the same, but it is not true. As seen in different types of loans, the borrower should take some time to consider the drawbacks and benefits of every product, because any kind of lender in the market is not perfect. The first step that a borrower can follow is looking at independent review sites of the lenders, and this simple step helps in determining both the advantages and the disadvantages of that lender. There are many different factors that can be seen across lenders of short term loans.
- Annual Percentage Rate Charged – This might get confusing for the potential borrower, as it varies from one lender to another lender. The borrower should compare the value of the loan and need to calculate the final value to be repaid. Also, good lender always communicates about this rate at the start of the process.
- Online Account Management –Certain lenders assist the borrowers with managing the entire process with the help of online facilities, but this factor alone does not determine that selected lender of short term loans is good. However, this factor improves the factor of convenience for the customer.
- Working on Weekends – There are certain lenders who work throughout the week, and therefore one can count on this factor as it gets very useful for businesses that are dynamic.
- Low Payment Charges – Some lenders don’t charge or charge a small amount for transferring the payment.
- Brokerage Fee – There are other lenders who charge a brokerage fee for guaranteeing an online account. Now, charging a brokerage fee is not illegal, but most of the customers don’t like it.
- No credit check pay day – This primarily offered for faster processing of loans.
Based on all the factors mentioned above, the borrower can conduct a detailed research to understand the different types of lenders. Conducting this research helps to determine how much money he or she requires before going ahead with the application of the loan. Since borrowing less money means less interest, this factor plays a crucial role in the entire loan process.
The information to be provided to the lender is very sensitive. Hence, for the borrower it gets important to get this right at the first time. The information usually requested by the lender includes-
- Social security numbers
- Bank statement
- Contact information
For the borrower, it is important to understand that the payments should be made on time, else any delay would get a borrower a bad credit rating. These steps of selecting the lender might not work for everyone; however, the set of steps is a good starting point for borrowers who want to avoid getting into bad debts.
Lenders who are established in the market always ensure the smooth running of the entire process of loan sanction. It is possible for the short term loans to be processed in a day and the borrower may even get the required cash transferred to the bank account on the same day of the submission of application.