Short Term Loans
A short term loan is a type of loan that is obtained to support a temporary personal or business capital. As it is a type of credit, it involves repaying the principle amount with interest by a given due date, which is usually within a year from getting the loan.
A short term loan is a valuable option, especially for small businesses or start-ups that are not yet eligible for a credit line from a bank. Short term loans are suitable not only for businesses but also for individuals who find themselves with a temporary, sudden cash flow issue.
Types of Short Term Loans
Benefits & Feature of Short Term Loans
Advantages of Short Term Loans
As short term loans need to be paid off within about a year, there are lower total interest payments. Compared to long term loans, the amount of interest paid is significantly less.
Quick Funding Time
It is considered less risky compared to long term loans because of a shorter maturity date. The borrower’s ability to repay a loan is less likely to change significantly over a short frame of time.
Easier to Acquire
Short term loans are the lifesavers of smaller businesses or individuals who suffer from less than stellar credit scores. It is generally easier to meet as relatively used for small amounts.