Whenever you require urgent money to expand your business or to start a new one, short-term loans are prominently helpful for you. Short-term loans are temporary and unsecured loans for short-term purposes or needs. You can obtain this loan for business or personal use. The repayment of this loan can be from 1 year to 5 years involved with a certain interest rate to the principal amount. This loan option is widely useful for small businesses or start-ups as banks are not easily providing business or personal loans to start-ups because of their credit score. So, whenever you require a temporary or sudden amount, you can easily get short-term loans from online lenders.
Types Of Short Term Loans
- Line of credit
It’s one of the popular types of short-term loans that is like a business credit card. Businesses having a good credit score can use this type of short-term loan in which a credit limit is fixed that businesses can use as per their need. The borrowed amount can be used at one time or also in instalments. The annual percentage rate is low in this type of short-term loan.
- Payday loans
This type of loan can be easily obtained from online lenders. In payday loans, the borrower has to repay the whole amount or sum of lump money with interest at once when the repayment day arrives. It’s one of the demerits of this loan; plus, the interest rates are high in this type of loan. It is suitable for event-based businesses
3. Merchant cash advances
A business having a high credit/debit transaction rate can apply for merchant cash advances loans. A borrower can easily obtain the required amount from the lender. The financial institutions recover the loan amount through the fixed percentage of the sales by the borrower. The lender can obtain the repayment amount from the sales of the borrower until the loan amount is recovered.
- Demand loans
Demand loans are secured business loans to fulfil temporary money requirements. The time period to repay the loan is fr\xed from seven days to one month in which a borrower is not charged a late penalty amount to repay the loan. If you are looking for demand loans for your personal expenses, fixed deposit, insurance policies, rent agreement, and more documents are needed as collateral to gain the required loan amount.
To The Sum Up
Short-term loans have several characteristics, such as high-interest rates, short-term tenure, insecurity, and low borrowing amount; despite all these, it’s the popular option for businesses and individuals to meet their urgent needs. However, this type of loan is easily accessible, and it’s the main reason for its worthiness. Therefore, if you are looking for easy short-term loans, you must evaluate the pros and cons of the loan types or the lender. Want more information? Visit us at https://swiftloans.com.au!