Monthly Archives: October 2012

Benefits of short term and unsecured lending for lower rates and fees

If you are facing short-term liquidity crunch, you might not have enough time to go through conventional channels of finance like banks. Banks generally ask for security, the valuation of which might take time you cannot afford. They also insist on a good credit rating, which some of us may be deprived of. In such cases short term finance or unsecured lending is your best way out. The demand for short-term financing has grown tremendously over the past few years. The ease and convenience of getting money to your bank account in just 48 hour with minimum documentation, from the comfort of your home, has generated considerable buzz in the nation, so much that even the traditional methods of financing are feeling the heat.

The reason for which you need the money and the amount of money required are the prime considerations before fixating on any mode of borrowing. When you approach a lender for short-term financing, they may ask you for your credit report. If you do have good credit history, it is quite simple to get the loan approved. Payday loans, a popular form of short-term lending does not emphasize much on credit history; so even if you have been working in a company with stable income for more than six months, you can qualify. Short-term lending is a borrower’s market; you have to use it to your advantage smartly.

In case, of a payday loan, you can apply online and furnish them with three months copy of your paycheck. If the lending company finds that everything is in order, they will be able to send the money direct to your bank account in 48 hours. Before payday loans became famous, most people would go for credit cards and personal loans, which needed a good credit history. This would put people with a bad credit history into a tremendous disadvantage. Fortunately, payday lenders do not emphasize much on credit history and are happy if you can prove that you are citizen of US, have a checking account, are above 18 years of age and have a job with consistent income flow.

Now, we have different types of short-term unsecured lending direct deposit advances, cash advances, personal loans, peer to peer loans and signature loans. These loans are based on the borrower’s capacity to repay the money on time. So, it is important to borrow money only when you really need it. Since there is no collateral component, short-term loans are notorious for high interest rates and fees which can even reach triple digits, if measured from a yearly perspective. In these times, the competition is so stiff among short-term lenders that they are coming up with better terms of borrowing that you can make use of as a consumer. Go through various online sites on short-term, unsecured loans, find out what they have to offer, read the terms and conditions properly to find out the hidden costs, if any; and then make a decision.