Do you need a short-term loan? When there are several days left before the salary, and there is no money for subsistence, no one to borrow them from, then the question arises of where to get money for a short time? It is clear that it is pointless to contact the bank with this problem. Loans for large amounts are issued here and it is necessary to collect a complete package of documents.
Various South African registered lending companies consider 1 -2 years as a short period of time. Most short loans usually have to be repaid within a year. You can get them within 24 hours. Plus, even if your credit history isn't great, you can apply for short-term loans for bad credit online. As the name suggests, this type of loan is not used for long.
Therefore, short-term loans over 6 months are an excellent solution for both individuals and companies that want to solve temporal financial difficulties.
General Characteristics of the Short-Term Loan
- The quick short-term loans must be repaid immediately, usually within six months to a year.
- They usually range from R500 to R250,000.
- It is possible to receive short-term loans online with a same day payout.
- They offer slightly higher interest rates than long-term loans.
- However, repayment may be cheaper than for long-term loans.
Steps for a Short-Term Loan
- Determine how much you want to borrow and how much you can repay.
- Compare short-term loan options and choose the right lender.
- You need to agree to the commitment on the following points:
- interest rate;
- the total amount to be repaid;
- the period in which the amount must be paid;
- payment deadline.
- After submitting the application, you will give the lender time to process it. During this time, they can review the history of cash flows and other financial instruments.
- If you qualify for the loan, the funds will be credited to your bank account immediately.
- You can use the money to quickly meet your financial needs. At the same time, you start repaying the short-term loan, as agreed, until the debt is fully covered.
What Type of short-term Loans Online to Choose?
Short-term loans are usually offered in the following forms:
- Payday loans
Payday loans are common in South Africa. They are easy to get in many reputable banks and lenders. Payday loans are usually taken to cover emergencies while waiting for a salary.
If your salary is in your bank account, the lender is entitled to the amount received and interest. This type of financing has very high interest rates and usually has to be paid in one installment.
- Merchant cash advances
Merchant cash advance is a great opportunity for companies facing cash flows and capital problems. The process is simple and straightforward: the company takes the money from the lender. The creditor, in turn, has access to the business card terminal.
If a business receives money from customers through card payments, the lender receives a small payment until the loan is fully repaid.
- Online short-term Loans
You can access the loan online by going to the website of the accredited credit institution and filling out the form. In all cases, the request and processing are done via the Internet.
Once the loan is approved, the funds will be immediately transferred to your bank account. Payment is usually made by a lender who automatically withdraws part of your account.
- Invoice financing
This type of financing is designed to help companies that expect their customers to pay. Therefore, companies can receive money for unpaid invoices (loans). The amount is usually a percentage of the account’s total amount.
In the event of a final payment to customers, the lender receives the amount of the debt, including interest and other payments.
- Credit line
Credit lines can be thought of as business credit cards. Entrepreneurs can use the money from the credit line. This amount depends on the credit line limits.
The company must then return the amount and interest used. The number of monthly payments also depends on the amount of money the business receives from the credit line.
Advantages of Short-Term Loans
- Pay a low interest rate - because you usually have to pay off the debt within a year. This leads to lower interest payments compared to long-term loans.
- Money can be accessed quickly - most lenders are ready to give money as soon as the debt has to be repaid in a short period of time. Once the request is successful, the money will be transferred to your bank account (sometimes within a few minutes).
- There are no strict requirements - your credit rating should not be optimal for short-term loans. Most businesses and individuals can easily apply for short-term loans for low credit scores. This is because borrowed money is usually less than long-term contracts.
Disadvantages of Short-Term Loans
- Penalties can be expensive: If you do not repay the loan under the terms of the contract, fines and interest rates can make the short-term loan very expensive.
- Working with unreliable lenders will be very costly for you - although it is relatively easy to get short-term loans, some lenders can use them for unreasonable payments and interest rates.
- You can borrow only a small amount - the lender will require you to repay it in a short period of time.
What do you Need to Apply for a Short-Term Loan Online?
Before considering your application, the selected creditor may check the following:
- Bank report showing account activity for the last three months;
- Proof that you are 18 years old;
- Confirmation of permanent income, as there are usually no short-term loans no credit checks.
Short-term loans should only be obtained if you can pay the required monthly payments. Failure to do so may result in your creditworthiness and increase your debt.