What Are Short Term Loans?
What Are Short Term Loans?
A loan scheduled to be repaid in less than a year. When your business doesn’t qualify for a line of credit from a bank, you might still have success in obtaining money from then in the form of a one-time, short-term loan (less than a year) to finance your temporary working capital needs.
One option is the short-term loan, which provides borrowers with set quantities of cash to be paid back over predetermined periods. Like traditional loans, short-term loans require applicants to pay interest on the principal advance, and usually involve smaller cash sums and shorter repayment periods.
It is a financial arrangement between a lender and borrower that is scheduled to be repaid in less than a year. When a business doesn’t qualify for a line of credit from a bank, one might still have success in obtaining money from then in the form of a one-time, short-term loan (less than a year) to finance their temporary working capital needs.
Worth-mentioning is that it is important to know beforehand that short-term loan providers have set a few criteria for an applicant to qualify for a payday loan. You need to be a citizen of South Africa and older than 18. You must be employed and earn a regular salary and hold a valid bank account.
To get a short-term loan in South Africa, most if not all Financial Services Providers need the following:
• a valid South African ID
• a valid and operational bank account
• You have to be employed and earn a regular salary.
Payday lending operates on a 40-day cycle which means that a client can repay his/her loan when they next get paid.
Short term loans are required for various reasons namely like car repairs, family vacations or an unexpected emergency that may pop up. A good example is someone who works an eight to five job every day of the week and get a salary every month that enables them to cover their important expenses, like paying your rent/bond, paying your bills, and purchasing their groceries, etc. But what happens when they need cash mid-month? After having done everything theyu needed to do with their salary, a short-term loan is the best and wisest route to take when faced with an emergency.
A good example of a short-term loan is a payday loan. Every lender has different criteria for taking out a loan – some of which may land someone in more trouble than you were before taking out the short-term loan.
With so many financial organisations offering short-term loans, or any kind of loan for that matter, people face the dilemma of figuring out which one is right for them: which loan will suit their financial state and lifestyle.