What is a Short term loan?

Some colleges offer short term loans to students. The borrower must be a student and must be able to show that the loan can be repaid in a certain amount of time, i.e. 60 days. If a student is expected to receive student loans or other student aid, the college may lend a higher amount that would be due upon receipt of the student aid.

Payday loans are offered by many kiosks around cities or via the internet. These are unsecured, high interest loans that are usually due with the deposit of the borrower’s next paycheck. For example, a payday loan company may offer a loan and charge $35 for each $100 borrowed. Of that $35, only $5 goes towards the principal. The company keeps $30 for “fees.”

Banks also offer short term loans. These loans can have a maturity date as early as 60 to 120 days from the date of inception of the loan. Bank short term loans can also mature up to one to three years after the inception of the loan. The terms depend on the bank and the amount of money borrowed.

Many banks may also require collateral, depending again, on the amount borrowed. The smaller the loan, the less apt the lender or bank is to ask for collateral. The application process is a bit longer in that the bank will check the borrower’s credit to be sure the borrower has the ability to pay the loan back. In the case of a small business borrowing money, the lender will review cash flow history and in the case of an individual borrowing money, the lender may require paystubs. They may also look at a borrower’s personal credit score – or in the case of a business, business credit score – to determine whether to grant a short term loan. Banks will also offer short term loans for a lower annual percentage rate than a payday loan service.

Interesting facts

• what is Bencmark Prime Lending Rate?
  A short-term interest rate quoted by a commercial bank as an indication of the rate being charged on loans to its best commercial customers. Even though banks frequently charge more and sometimes less than the quoted prime rate, it is a benchmark against which other rates are measured and often keyed. For...
• Michael Thomas (born March 8, 1988 in Olathe, Kansas) is an American soccer player, who is currently playing for Major League Soccer club Sporting Kansas City.
  Thomas attended University of Notre Dame where he played in midfield for the Notre Dame Fighting Irish. Thomas was selected to play with Region II (Midwest) 88 ODP Regional Team in...