Short term loans are loans that are taken out over a short period of time. They often have higher rates of interest than longer-term loans, with the idea being that you pay them back so quickly that you don’t end up paying back too much overall. They are also often available to people with lower credit scores, whereas longer-term loans are often more difficult to obtain for this cohort.
Because the interest rates are so high, it’s imperative that you ensure that you make payments on short term loans within the agreed time frame. The types of short term loans available differ from state to state due to the different laws governing financial transactions. Listed below are some of the types of short term loans available in Corpus Christi, TX.
Payday loan
Payday loans are sometimes also known as a cash advance or check advance loans. You will be loaned an amount of money that the lender thinks you will be able to pay back, based on the expected amount of your next pay check. These loans are based on your credit score, but they are often given to people with low credit scores, which means that they are easier to obtain than other types of loan. However, they do come with a high rate of interest, which is important to take into account if you are considering a payday loan.
Payday loans are ‘unsecured’ which means that they don’t require any type of collateral in order to take one out.
Car title loan
If you take out a car title loan, you will be loaned a sum of money based on the value of your car. Typically you can borrow up to 50% of the value of the car.
Car title loans are secured loans – you put your car up as collateral in order to take out the loan. You must own your car outright in order to qualify for a car title loan because when you take out the loan you actually transfer the title deed over to the lender for the duration of the repayment period. You can still drive the car during this time, but the lender owns it so that they can claim the car if you were to default on your payments.
Because car title loans are secured, your credit score isn’t as important as for other types of loan. Follow the link if you’d like to learn more about car title loans in Corpus Christi, TX.
Lines of credit
A line of credit works in a similar way to a business credit card, and as such is usually an arrangement used by businesses. A credit limit will be set with a supplier, and a business will be able to spend up to that limit. They will pay back an agreed amount of the credit line each month.
Lines of credit are often used by businesses to allow them to purchase the stock that they need so that they can sell it and make money.
Merchant cash advance
A merchant cash advance means that you would borrow money from a merchant, making use of the line of credit that they have with their lender.
Each time you make a purchase against that line of credit, the merchant would take a small amount of profit, and this would continue until the debt is repaid.
