What Can I Use My Short-Term Loan for?
Life is full of phases and we go through different experiences in each phase. Depending on the intensity of the experience, we may require to seek money from friends, relatives or colleagues and if they fail, we turn to financial institutions.
One of the help you may seek from financial institutions is a short-term loan. The loans differ from one financial institution to the other. Quick short-term loans are meant to help you fulfill a short-term goal.
What is a short-term loan?
Short-term loans are meant to meet a short-term financial need. Mostly, the need is usually unforeseen and borrowers are in a rush to get money. The loan amount is also small and can range between 100 pounds to 100,000 pounds.
Because of the urgency of the loan, its processing time is hastened and sometimes, the protocols are bypassed. As a result, they attract higher interest compared to other types of loans. You can access the loans from traditional financial institutions and also from non-traditional lenders.
Even though some of the protocols are bypassed during the processing time, most financial institutions will ask for collateral. Both the business world and individuals seek short-term loans. There are many reasons why individuals and businesses borrow short-term loans.
To meet a budget gap
As an individual, you may only have one line of income, which means that you receive the same amount of money every month, especially for the employed. Factors like currency depreciation and high cost of living can affect your income and create a gap in your budget.
In such a time, you may need to apply for quick short-term loans to help fill the gap. You can use the money to pay for utility bills, buy groceries, or other personal needs.
Paying for college education
Your child could have done well in his or her final exam and they need to join college soon. Sometimes you may not have enough money but your child’s higher education is important.
Because college enrollment deadlines do not change, you can apply for a short-term loan and pay for your children’s college. The money can help cater to tuition fees, buy books, help for upkeep or rent a room if they will be studying far from home.
Cater for hospital bills
No one can predict when sickness can strike but anyone can fall sick anytime and be hospitalized. The sickness can be serious and the bill goes beyond the amount your insurance can cover. The more your loved one stays in the hospital, the more the bill will continue increasing.
The solution will be to take a short-term loan to help clear the bill so that your loved one will go home and join the rest of the family.
Supply goods or services
You could be a business person and in your marketing campaigns, you receive an order to supply a certain amount of goods or services. Your bank account may not have enough money, yet you need to supply the order or lose your chance to make a profit.
A short-term loan will help in such a time. Because the loan is processed fast, you will be sure to get the money in less than 24 hours. By supplying on time, you will get a chance to supply another time and you will also add one more client to your list.
Repair your car
Your car can develop mechanical challenges at a time when you have no money. It could be the only car you use for your business or when going to work. Your payday date could be two weeks away and you cannot wait that long to repair your car.
Your financial need will be short-term and the best option is to apply for a short-term loan, repair your car and pay once you get your pay. The lender can process your loan within a short time.
When you have an emergency repair for your house
There are times when nature gets violent and causes great damages to our homes. Strong winds can blow and rip off your roof or heavy rains soak the soil below your house foundation and it tilts or begins to sink.
Your house is your shelter from cold nights, hot sun, dust and bad people and if it’s broken, you cannot have peace until it’s repaired. If you don’t have enough money to repair your house, your solution will be to take a short-term loan.
Start a business
Start-ups need a larger amount of money. You need to hire an office space, do registration, buy furniture, stock up or buy computers and software. Most young entrepreneurs have difficulty starting up a business because of a lack of money. If you have a good business plan, you can apply for a short-term loan and top-up to your start-up savings. Once your business starts, you can pay your loan within a short time.
JR Dominguez is the technology, finance and music editor for MiLLENNiAL. When he's not writing, you can find him day-trading stocks, playing video games, or composing commercial scores.