Types Of Short Term Personal Loan

Short term personal loans will be offered by banks and online financial companies. The short term personal loans do not require any collateral. But the online financial sites require only a credit check while approving the personal loan. The interest rates are higher in short term personal loans when compared to other type of loans. The reason for high interest rates is shorter time period of loan repayment. The banks and financial companies generate the revenue by interest rates.

The types of short term loans are:

• Emergency cash loan: The emergency cash loan offers money to those who have urgent requirement of money. The borrowers will use this type of loan to cover immediate expenses such as medical bills, home or car repairs, and unexpected events.
• Payday loan: Payday loans have high interest rates when compare to other short term personal loans. The banks and financial institutions require proof of employment (e.g. a pay check) for offering the payday loan.
• Line of credit: This type of short term personal loan handles the cash flow issues. The advantage of this loan is that the banks do not charge interest for the amount that you don’t use.
• Bridge loan: This type of loan is a good option for new home buyers who can't hold off on buying a new home or selling an existing one.