The Best Guaranteed “Short-Term” Loans for Bad Credit

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The Best Guaranteed “Short-Term” Loans for Bad Credit

  • nuptsetroupe

    Where personal installment loans are designed to finance larger and longer-term purchases, short-term loans are just that: short-term financing. Typically extending between a week and six months, short-term loans, sometimes called cash advance loans, are repaid in a single lump sum that includes both the principal loan amount and any applicable interest or finance charges.

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    While many short-term loan lenders offer flexible credit requirements — so flexible it’s practically guaranteed — that flexibility comes with a price. Namely, most short-term loans have particularly high interest rates. In fact, some short-term cash advance loans can have APRs in the hundreds of percentage points, with a 400% APR not unheard of (or even uncommon).

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    Another concern when it comes to short-term loans is ensuring you can repay the entire amount at the end of your loan, since you’ll be required to hand over the full loan amount plus all fees. If you can’t repay the full amount, you may be stuck paying substantial late fees on top of what you already owe.

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    In some cases, you may choose to extend your loan for another few weeks or months to avoid paying late fees, but it’ll cost you another round of finance charges to do so. If you know you will need a longer period of time to repay what you borrow, you may want to consider a personal installment loan instead of a short-term loan, as installment loans can be repaid in smaller monthly payments over six months or more.

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    Although not often considered as a loan alternative, credit cards can be a handy form of financing for certain types of purchases. In particular, most occasions where you would consider a short-term loan, you can likely use a credit card instead. And, given that the average credit card charges an interest rate around 16%, using a credit card instead of a higher-APR short-term loan may actually be the more frugal choice.

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    The options for credit cards will include unsecured cards and secured cards. Due to the initial deposit requirement, secured credit cards are one of the few “guaranteed” forms of financing in the consumer credit world, as some may not even require a credit check at all. Start exploring your options with our list of top cards for bad credit.

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