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.
John Mussi
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