If you find yourself in an unexpected scenario where you need to borrow money to meet an emergency need, but you intend to repay the loan in a few months or less, short-term loans are a fantastic option to consider (but hopefully less). If, on the other hand, you’ve looked into personal loans before, you may be surprised at how high the interest rate is. If you have previously researched personal loans, this might be the case.

Despite the fact that the cost of a certain short-term loan may seem to be exorbitantly expensive at first look, if you complete the loan calculation throughout the time period that you have set, you may discover that the loan is, in reality, still reasonable for the attainment of your objectives.

On the other side, you may discover that a certain loan arrangement is too expensive for your needs. In this case, rather than asking for a short-term loan, you should look into your other financial options.

If you are wondering if a short-term loan will be beneficial to you as a borrower, we have given you with a concise and informative guide to assist you make that choice. And, before you ask, no, we’re not referring about the Guru walking around without the platform sandals he usually wears when he does things like that.

How to do the required research and choose the finest short-term loan for your requirements

There are two factors you should consider while searching for the best short-term loan for your needs, and they are as follows:

In the beginning, when it comes to interest rates, you should take them with a grain of salt. Despite the fact that it may seem to be excessive, the fact that you are only borrowing for a limited period means that you may not be required to repay a considerable amount of extra money.

The next section will describe how much time you will need to make payments on the debt that you owe. Because you will be required to pay a high interest rate on any money borrowed, you should make it a top priority to take out the loan for the shortest amount of time feasible.

An annual percentage rate, or APR, is a common method for communicating your interest rate and, hence, how much of your credit you will be required to return (or Annual Purchase Rate). However, since a short-term loan is often secured over a few months, this means you will never be compelled to pay as much as it seems because you may only be borrowing for ninety days. This is due to the fact that short-term loans are often taken out over a few months. As a result, there is no longer any prospect that the whole amount will ever need to be returned (for example).

Instead, look at the illustrative example to determine how much you should plan to repay. Because the interest rate is high, it is critical that you ensure that you will be able to make the repayments on time by planning ahead of time and having adequate finances available.

The interest rates that apply to the various forms of loans

It’s also possible that, as part of the loan transaction, the lender may provide the borrower a variety of interest rate alternatives to choose from, such as the following:

Fixed APRs

  • Your lender will determine the annual percentage rate (APR) of interest you will be charged.
  • There will be no difference in the overall amount of money that you must return.
  • Prior to beginning the process of paying payments, you will have the option to evaluate the specific repayment plan that has been prepared for you.

The primary benefit of having a fixed annual percentage rate (APR) is that you will not be subject to any additional fees or interest rates when repaying the loan. This is the major advantage. This form of interest rate is frequently seen as more favorable than others since it allows you to correctly predict when you will be required to make payments in relation to the term of your loan from CitrusNorth.

Variable APRs

  • Your lender will determine the annual percentage rate (APR) of interest you will be charged.
  • If the underlying market conditions change significantly, this rate may be modified.
  • You will be provided a repayment plan; however, the amount owed is often subject to change and may fluctuate from the first estimate.

You may also choose a variable annual percentage rate (APR) as part of a loan offer, which means your interest rate will fluctuate in parallel with market interest rates. If you choose this option, your interest rate will fluctuate in response to changes in the market interest rate. This is often in line with the Bank of England’s interest rate; but, since this is a short-term loan, the interest rate will be significantly higher.

Can you help me in obtaining a short-term loan with a reasonable interest rate?

Instead of focusing on the lowest available annual percentage rate, you should seek the shortest possible loan term (APR). As a result, you won’t have much time to accumulate a significant amount of interest, which means you may be able to limit the amount of money that you have to pay back to the absolute bare minimum.

Unfortunately, the great majority of lenders providing short-term loans will charge you a somewhat high annual percentage rate (APR) to compensate for the fact that you will only be borrowing money for a short period of time. Even if a variable APR is less costly than a fixed APR, it is still vital to check the usual example to have a clearer understanding of what you may wind up having to pay in total. This will enable you to make a better educated judgment about whether a variable APR is appropriate for you.

What can we anticipate next?

Are you prepared to start searching for loans in a short amount of time? Before you start submitting applications in haste, you must first utilize our free money matcher comparison tool to see whether or not you are qualified for the program. The most advantageous element of this is that it will have no influence on your credit score; nonetheless, it will offer you with the opportunity to see the loan options that are most suited to your circumstances.

As soon as you are certain that you are qualified (you can learn more about eligibility on this page), you are welcome to use the link provided below to browse through all of our available short-term loans and choose the one that best meets your needs. Best wishes!

Author bio

Krystel Shaylee Hudson

Loans Writer at Citrus North

Krystel is a Citrus North personal finance writer. She is a freelance personal finance writer located in Dallas. She is interested in writing about all kinds of personal finance issues such as mortgages, debt or student loans, auto financing, and personal loans. In the past, Krystel worked in search engine optimization (SEO) and affiliate marketing for a major home improvement business. When she’s not working on her computer, Krystel can be found working as a volunteer or trying out new coffee places.