There may come a time when you need additional financial help, especially if you’re faced with an unprecedented emergency. This is where short-term loans can be useful. There is a huge range of lenders that can offer amounts to suit your needs, with various repayment terms so you can choose which is best for your current situation. Whilst these online lenders are more flexible than traditional lenders, they still have a few requirements you’ll need to meet before you can be approved. Read on to find out more!
What is Short-Term Loan?
Short-term loans are exactly that, loans that are typically paid back in a few months to a year. There are a few different types of short-term loans, for example, a payday loan is there to help tide you over until you get paid if you’re faced with an emergency and your cash flow won’t stretch to cover it. These loans are typically paid back within the month. There are other types of short-term loans that you can choose from that allow you a more flexible time frame to pay them back, depending on which is best suited to your financial situation. These loans are offered by online direct lenders, which means approval is quick and easy. They also base their decisions on affordability rather than credit score or history, which means you can be approved even if you’ve struggled to manage your money in the past.
Before you can apply, it helps to think about some of the drawbacks too, for example, these loans can come with higher interest rates, and you need to make sure you can afford the repayment terms so you can be sure that you don’t fall further into financial difficulty. These loans should only be used to help you deal with emergencies, not as a long-term solution.
What Do You Need to Qualify?
If you’re faced with an emergency that your monthly income cannot stretch to cover, you may choose a short-term loan to help you manage. As we mentioned above, short-term loans are offered by online direct lenders making the process so much easier than what you’d find with a traditional bank – but there are criteria that you will have to meet if you’re hoping to be approved. Here’s what you should do to qualify for a short-term loan.
1. Improve Credit Score
Whilst you don’t need a good credit score to be approved for these loans, it can help put you in a better position. If you think you may need financial help in the future, improving your score means more chances of approval and more manageable interest rates. To do this, you should ensure that you’re paying off your outstanding debts and paying your bills on time and in full. This shows lenders that you are creditworthy. Paying bills as necessary means you’re less likely to default, and it shows that you’re doing your best to improve your finances.
2. Find the Correct Documents
When applying for your short-term loan, there are a few documents that you will need to help the process run smoothly. Providing the right documents also means your application is likely to be dealt with more quickly, which is beneficial. These loans will require you to have a form of monthly income. This is so that lenders can be assured that you have a way of paying back the money you’ve borrowed. They will also need to see that you have a bank account before approval. You could use a bank statement to show this. Providing the documents your lender requests and filling your application out accurately gives you more chance of fast approval.
3. Find a Loan That Suits You
Qualifying for a short-term loan can depend on the lender and the loan you choose. This is why it’s so important that you do your research to find a lender with terms that suit you. If you choose a loan for an amount that your income is not going to allow you to pay back in the agreed time frame, your lender will reject your application. To save you time, and to give you a better chance of approval, choosing a loan that suits your needs, and that you’ll be able to pay off is essential.