Do you need money? For example, because your laptop broke and you need a new one? Or do you want to buy a new car, but do not you have the money to pay for it? Can not you borrow the money you need from family or friends, or would you rather not? Then a short-term loan can be a solution. So you can now buy that new laptop or car, and you do not have to wait until you have saved the amount you need. Do you want to know what a short-term loan exactly means, in which forms you can find it and how to request it? Then read on quickly.
What is a short-term loan?
A short-term loan is a loan that, as the name already gives away, is for a short time. The time varies from a few days to about a year. The nice thing about a short-term loan is that you can use it to make a purchase, for which you do not have the money yet. So you can finance a purchase like a new laptop, washing machine or a couch with a short-term loan. Even if you want to take a holiday or, for example, make a nice trip, a short-term loan can be a solution.
Types of short-term loans
The personal loan is probably the best known form of a (short-term) loan, but there are many more forms, such as a flash loan or a revolving credit. Below we have listed the various options for a short-term loan for you.
A flash loan or mini loan is the fastest way to get extra money. Especially if you have previously had a loan from a lender and paid it off on time, you can literally get money within 10 minutes with a flash loan. The flash loan is the solution for those who need money fast. Borrowing is often possible up to an amount of 1500 euros. It is a very short-term loan, since the maximum number of days you borrow is usually 30 days. Once you have paid back the loan properly, you can immediately take out a short-term loan again. You can close a flash loan with Ferratum and Saldodipje.
Buy on installment
Buying on installment is also a short-term loan. Suppose you want (or have to) buy a new car, but do not have the money right now. Then you could opt for a purchase on payment, as you can also do with online purchases. This is a very easy way to buy something that you currently do not have the money for. You buy something now, get it immediately (or quickly), and pay the product back in a few months (or even years). Buying on installment is a short-term loan that you can not borrow money from, but can finance a purchase.
When you are red on your payment account, this is also a short-term loan. After all, you have access to money that you do not have (yet) at all. At most banks you can be red for a maximum of a number of months. You can often adjust the preferences for the red online, or otherwise arrange by telephone with an employee of the bank. So you can set a limit and you immediately know how long you can stand red. Standing red is an expensive form of borrowing money, but it is easy to realize. When you compare a number of banks with each other, you will see that the costs for red are not the same everywhere. If you are often red, or if you plan to do that often, it is useful to look at a bank where the costs are not too high, so you do not have to pay unnecessarily a lot for the red .
A credit card works in a way like red. You buy something you can not yet pay and then resolve it when you can. Actually, the red is on a separate account. With a credit card you can not only finance purchases, but also withdraw money to, for example, pay bills, which is nice when you have at the end of the month just a little too little money. The disadvantage of a credit card is that here too interest is quite high and you have to pay for membership.
Borrow money with collateral
It is possible to borrow money by using a collateral. You can take out a loan from the bank, for example by using your house (mortgage loan), any securities (shares or bonds) or your life insurance as collateral. Do you take out a mortgage loan and do you not meet your payment obligations? Then the bank can sell your house to get the borrowed amount back. Borrowing with collateral can also be of value with, for example, jewelry, a painting or other artwork, gold coins or other items. The city bank or a pawnshop determines the value of the collateral that you bring. If that value proves to be sufficient, you can immediately receive a loan. After the loan has been paid off you can pick up the collateral again. Here too, the collateral can be used to recover the borrowed amount if you fail to meet your obligations.
A revolving credit may sound like it is a loan for several years. That may be the case, but it could just as well be a short-term loan. You are allocated a maximum credit, where you can decide when you pick up something and whether that is the whole amount or only a part of it. If you do not accept anything, you do not pay interest. You only have to pay interest on the credit that you have actually used. The interest rate for a revolving credit differs per bank or lender.
A personal loan can also be a short-term loan. You agree with the bank or lender beforehand how long you want to borrow and for what amount. Personal loans are often taken out for the purchase of, for example, a new car, where the term is usually no longer than 5 years. But you can also take out a personal loan for a much shorter period.
When you think about taking out a short-term loan, it is important that you first determine which loan suits you best. The choice of loan depends, among other things, on how much you want to borrow, how fast you want that amount, and how long you want to spend on the repayment. When you know which loan is best for your situation, you can compare this loan with various providers.
Borrowing money, costs money
“Borrowing money costs money” is a sentence that you undoubtedly know from various advertisements. The amount of money that a loan costs depends partly on the interest you have to pay on the borrowed amount. In addition, there are almost always administrative costs, which in some cases can be quite high, so you end up paying a lot of money for a loan. Avoiding a loan is actually the best advice, since it always costs more than you actually borrow. If that really is not possible, then look especially at your situation and what is most convenient for you, so that you do not get into trouble afterwards.
The interest you pay on the short-term account depends on many different factors. Not only does it depend on what kind of loan you take out, but also with whom you do that. The duration also counts when it comes to the level of interest. That is why, when you have made a decision about what kind of short-term loan suits you best, it is useful to look at the level of interest at various lenders. You can easily do this via various comparison sites.
Close short-term loan
Short-term loans exist in many different forms. The most important thing is that you choose a loan that suits you and your situation. For example, if you only need a few hundred euros, a flash loan or red can be a handy choice. If the amount you need is higher than the limit on red or the maximum that you can borrow with a flash loan, you can take out a personal loan. Compare the providers and their conditions well, so you do not pay too much interest, and know where you stand. As you have read above, you can also buy a product on installment. This can be useful when you need the money to finance a certain product. You then repay the product in installments, which means that you can repay it just like with a loan. Always check the conditions of the provider where you buy the product, so you will not be faced with surprises.