The characteristics of a short term loan:
A short term loan is a traditional loan that is acquired for a short period of time. This term is anywhere lesser than a year’s time. What this means is that the maturity period of the short term loan is lesser than 365 days.
The amount to be borrowed is small: when a shot term loan is acquired, it is assumed and also understood that the mound seeked to be borrowed is small compared to the amounts that large and very large organizations borrow to u=run their business processes.
The rate of interest is commensurately high: the average rate of interest on the short term loan even though statutorily provided by the government can be in the range of high in the cases if short term loan. The reason for charging slightly higher than the average rate is that if the borrower had to borrow such sums from any other public or private credit institution, he may still have to pay through his nose.
No stringency in processing: short term loans are easiest to procure where the application of the loan can be done through your smart phone itself and within a matter of few minutes the loan may be sanctioned and already transferred directly into the borrowers’ account.
The hassles of acquiring a normal loan:
If you have ever in your lifetime applied for a loan of any nature and denomination in the traditional sense of the word, you will know what a hassle it is to procure one!
Starting from the research as to where to procure one to how much is permissible to what are the risk factors and the mounting interest rates, you can be hassled no end because of the humongous amount of paperwork that it can warrant.
Short loans are heaven sent for the following reasons:
When it comes to borrowing money for small and medium businesses, there is nothing more correct than a short term loan. A small business constantly needs to re invent itself in order to stay afloat. The competition can be killing if they stagnate. Therefore, these organizations are always in needs for funds in order to think up and produce a line of fashion or may be introduce a new line of service if they are from the service industry.
Sudden possibility of being cash strapped in the business:
Small businesses can at times be cash strapped when the money is in rotation but not in hand. Thus, even for paying mandatory taxes and fees, a small business can ask for a short term loan.
Seasons and their demands:
Sometimes, a festive season can demand having to bear extra expenses in the business. A short term loan can take care of such a need. Companies are the best bets for short term loans.
Sometimes, there can be emergencies and they can catch you unaware. A short term loan is a boon in such cases.
The advantages of acquiring a short term loan:
The short term of the loan:
The shot duration of the loan ensures that Millersville University - Private/Alternative Education Loans can come out of the loan debt as early as possible. Ideally, the loan gets over within a year.
You can improve your credit score favorably
This one can be a bit tricky. If you are currently suffering bad credit, the best thing for you to do is to improve your score rapidly by applying for a short term loan and then repaying it quickly!
However the disadvantages of a short term loan are:
The higher interest rates:
A short term loan is always fraught with the risk of higher rate of interest. This may be particularly true in case of a booming economy. On the contrary, the rate of interest has the tendency to plummet when a sudden recession happens in the economy.
The freedom to spend higher sums of money
The idea that a short term loan is readily available can make the business feel slightly irresponsible and they may acquire a tendency to spend more than required. This has been noticed as a trend in a lot of companies where the excessive application of short term loans ends them with burgeoning debts.
Starting from the research as to where to procure one to how much is permissible to what are the risk factors and the mounting interest rates.
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