There are two types of loans that we can obtain more easily, instant personal loan and short term loan. The main difference between the two is repayment period. With short term loan, the period could be about one or two weeks, while instant personal loan could be extended to about one month. Another difference is the amount of money we could borrow. With instant loan, we could get more money, but we will get less with the short term one. When applying for loan, lenders typically ask us for collateral, such a house or car. It is an essential factor if we want to secure a credit. In some cases, our next paycheck can be used as collateral if we seek to borrow relatively small amount of money. The application process for both short term loan and instant personal loan is usually quite simple and it will take a shorter time to complete. The paperwork can be reduced to minimum and lenders could ask only for basic information. We should be about 18 years of age, so we could be eligible.
Before applying for both loans, we should be able to show that we have a stable source of income, which is suitably consistent to allow us repay both loans. In this case, we could be required to provide a proof of employment and we must work for a specific period of time in the company before we are eligible for loan. However, some lenders could ask only information about employer and our contact information. Given the fast and simple procedure, lenders will see both loans as riskier. Their requirement to verify our employment status should be quite understandable and we shouldn’t be too surprised if we get higher interest rates. A common misconception with short-term loans, such as payday loans is that they can be granted instantly, due to minimal pre-approval stage. However, such a stage does exist and if we don’t qualify due to specific factors, it is possible that process will become much longer.
There are things we should consider when we look for online loans. We should avoid accepting the first offer we see, without making enough comparisons. The costs of credit and the repayment period should be analyzed carefully. We should be able to choose loans that suit our repayment possibilities and requirements by making extensive comparison. The amount of fee charged by our lender could also have a significant effect on the overall costs of getting a loan. In general, costs of applying loans could be about 20 percent from the borrowed amount. However, by making proper comparison, we should be able to find deals with lower prices. Regardless of which lender we choose, we should be aware that short-term credit and payday loans always have higher interest rates compared to standard loans, especially long-term loans that are backed with collaterals. We should calculate our budget carefully before applying for a loan. There are different varieties of short-term loans and we should choose the one that matches our situation.