Approximately four out of five U.S. workers currently live paycheck to paycheck. If you’re part of this group, you know how devastating even a small unexpected expense can be.
When you’re in a jam and aren’t sure how you’re going to make ends meet, short-term loans can be a viable solution. The key is to make sure you’re using the right kind.
Read on to learn all about some of the most popular types of short-term loans.
Cash Advances
Many credit card companies will allow you to get a cash advance from a bank or ATM. If you only need a small amount of money, this can be a good option to consider.
Keep in mind, though, that cash advances often come with high fees. You’ll also need to pay the money back as soon as you can to avoid getting hit with a lot of interest.
Lines of Credit
You may also want to consider applying for a line of credit from your bank or credit union.
A line of credit gives you access to additional funds to help you make ends meet. In many cases, a line of credit is preferable to a traditional loan or a cash advance. You can borrow against this line of credit when you need it and keep it around as a safety net for the future.
Lines of credit often have lower interest rates than credit cards, too.
Title Loans
If you don’t have a high enough credit score to qualify for a line of credit, another viable option is a title loan.
Title loans are secured by the title of your car. This means you use your car as collateral and, if you don’t pay back the loan, the lender will put a legal lien on your car.
Most title loans have to be repaid within 30 days or less. The stakes for them are quite high, but they’re also easier to get than some other loans.
Payday Loans
You can also consider a payday loan.
Payday loans are short-term, high-interest loans that often need to be repaid within 2-4 weeks. Payday loans are usually for small amounts of money (the average payout is $350).
If you decide to apply for a payday loan, make sure you understand how it works and the specific terms of the loan. Otherwise, you could end up paying a lot of money in interest and fees.
Apply for These Short-Term Loans Today
If you’re in a bind and need help paying bills or covering an unexpected expense, short-term loans can be very helpful. Keep this information in mind so you know which type of loan is the best option for you and your needs.
Do you want to learn more about managing your finances? Do you need help building a savings account so you don’t have to take out loans in the future?
If you answered “yes” to either of these questions, check out the Money section of our site today. You’ll learn lots of tips and tricks here that will help you gain financial freedom once and for all.
