Short Term Loans over 12 months are Likely to Offer Better Interest Rates than Payday Loans

Longer Term Personal Loans Likely Will Offer You Better Terms

When you need to borrow more than $1,000 and your credit may now be amazing or your pressed for time, it’s worth considering an online short-term loan versus a cash advance loan. With the popularity of personal loans continuing to grow, many lenders now will allow you to take 1 – 7 years to repay the loan. On the other hand, payday loan has tight repayment schedule where you are required to pay back in 2 – 4 weeks.

It has a low interest rate starting from 6% which is significantly cheaper compared to payday loans that has a sky high interest of more than 400%. Short term loans can offer a low interest rate because it doesn’t have to deal with the same operation cost as a brick and mortar personal loan shop. When you are on a loan comparison search engine, you can quickly get a glance on the range of APR interest rate that different lenders charge.

If you are interested in finding out a more accurate APR interest rate, you can fill in the online form. They will send you an email if you get preapproved. You can submit as many application forms as you want to get the estimate APR interest rate quotes. This allows you to compare which lender is the cheapest. The loan that you apply should feature soft credit check so that your credit score is not affected the first time you submit the application. Before putting down your signature, make sure you read the loan contract as it discloses the full information on the interest rate and fee.

As a rule of thumb, you should only borrow the amount that you need. The interest rate that you are assigned depend on your credit score. Therefore, you should request for a free credit report and review it to see if there is any error that you can get fixed. Fixing somThe onliners in the credit report can help to raise your credit score. Online personal loan is the best option for young people who do not have an established credit profile. Many online lenders would look at other factors if you don’t have a good credit profile.

After you decide to proceed with the loan, they will perform hard credit check by pulling out your credit report. While checking your credit report and other financial documents, they will determine how much you can borrow and the interest rate. Many lenders let you select the loan term according to your convenience. If you have the finance, you should select a short loan term. Short loan term may have higher monthly payment but the total interest rate that you pay is lower. If you are tight on budget, you can select a long loan term with low monthly payment but you will pay more interest rate in the end.

Author: Don

Covering the financial markets since 2005. Love to learn and share ideas and tips. The best articles come from ideas presented by users of this website. Topics that we find interesting include personal finance, credit cards (especially awesome balance transfer and rewards cards), small business financing and loans for debt consolidation.