Short-Term Loans in The United States

Short-Term
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Updated:
18.04.2024
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Recommended FinScore™
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300
650
1000
100.00 – 20000.00 $
Rate
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Effective interest rate on the product

from 0.05 %
Term
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Loan term for the financial product

5 days – 3 months
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3.09
(20 Ratings)
Recommended FinScore™
0
300
650
1000
Rate
i

Effective interest rate on the product

from 4.00 %
Term
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Loan term for the financial product

to 1 months
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Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
100.00 – 1000.00 $
Term
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Loan term for the financial product

1 days – 1 months
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Submit One Loan Application Online!

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Rating by Finanso®
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The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

4.06
(20 Ratings)
Recommended FinScore™
0
300
650
1000
50.00 – 1500.00 $
Rate
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Effective interest rate on the product

208.04 – 782.14 %
Term
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Loan term for the financial product

14 days – 31 days
Moneytree
Payday loan
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3.138
(13 Ratings)
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0
300
650
1000
$100-$500
Rate
i

Effective interest rate on the product

up to 482.32%
Term
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Loan term for the financial product

up to 14 days
Centz
Personal Loans
Rating by Finanso®
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The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
$500-$5,000
Rate
i

Effective interest rate on the product

up to 139%
Term
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Loan term for the financial product

up to 24 months
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Reviews
CreditFresh
4.8
The application process was a breeze, and I received a response within minutes. This straightforward and prompt procedure proved to be a great help to me during a crucial time of need.
Review
JG Wentworth
4.6
The assistance I received was exceptional. My representative handled my case with care and provided all the necessary information...
Review
OneMain Financial
4.4
The loan application process was straightforward, and the representative I interacted with displayed patience, provided informative answers, and was quite pleasant throughout...
Review
My Funding Choices
4.6
The process was swift and straightforward, which was particularly helpful during a time when, despite my reluctance to seek assistance, I genuinely needed help.
Review
Plain Green Loans
2
The interest rate is shockingly high, and it feels like taking advantage of individuals facing financial challenges when unexpected expenses arise...
Review
Advance America
4.6
I have never encountered any issues with this company. They consistently deliver funds on time, and the repayment process is straightforward...
Review
Short-Term Loans

Short-term loans refer to a type of borrowing that typically needs to be repaid within a relatively brief period, usually within one year or less. These loans are designed to provide individuals or businesses with immediate access to funds to meet their short-term financing needs.

Short-term loans are often used to cover temporary cash flow shortages, unexpected expenses, or to seize immediate business opportunities. They can be obtained from various financial institutions, such as banks, credit unions, online lenders, or alternative financing providers.

  • Personal loans. You can get these installment loans for any personal purpose. However, your interest rates will depend on your credit history. The higher the credit score you have, the lower interest rates you will be charged.

  • Paycheck advance. You can consider it as borrowing from yourself. Your employer will send you a check in advance for the work you have already done. This short-term loan allows you to get money, not in the two weeks or a month' period, but as you need it. The chances you will get a loan will depend on your employer's willingness. The amounts you typically can borrow are quite small. Some apps limit it to $100, or $200, while others allow you to receive up to $500.

  • Credit card advances. Credit cards have a cash advance option when you apply for them. Cash advances frequently come at a different interest rate than your card. You can draw money at an ATM using your credit card or through a check mailed by your lender. If you need a cash advance and have a low-interest credit card or cannot qualify for a good credit history loan, this option may be quite suitable.

  • Pawnshop loans. These loans are secured by your valuable assets. If you fail to pay the loan back, your asset will be used to cover the loan amount. Pawnshops offer loan amounts of only 25% to 60% of your asset. Typical pawnshop loan amounts are from $100 to $1,000. The loan terms last for 30 days. You will be charged fees equal to 200% and more APR. As pawnshop loans do not check credit history, you do not need to have a high credit score.

  • Payday loans. Payday loans may not require a credit check but issues high interest rates and fees. The interest rate you can get on a typical payday loan goes up to 400%, while the loan term will be up to 2 or 4 weeks. The interest rates may be charged in the form of fees. For each $100 borrowed, you will get a $10 to $30 fee. The most loan amounts you can get on payday loans are $500 or up to $1,000. This will be an expensive credit, and before you apply for it, make sure you can pay it back.

Features

  1. Loan Duration. Short-term loans have a relatively brief repayment period, usually ranging from a few weeks to a year. They are designed to be repaid quickly, which can be advantageous for borrowers who need funds urgently or have a temporary financial need.

  2. Loan Amount. Short-term loans generally offer smaller loan amounts compared to long-term loans. The loan amount is typically based on the borrower's income, creditworthiness, and the lender's policies.

  3. Quick Approval and Disbursement. Short-term loans are often processed quickly, with minimal paperwork and a simplified application process. Some lenders offer online applications, enabling borrowers to receive approval and funds within a short time frame, sometimes within 24 hours.

  4. Higher Interest Rates. Due to the shorter repayment period and perceived higher risk associated with short-term borrowing, interest rates for short-term loans are typically higher than those for long-term loans. Borrowers should carefully consider the interest rates and factor them into the overall cost of the loan.

  5. Flexible Repayment Options. Short-term loans may offer flexible repayment options, depending on the lender. Some loans may require a single lump sum repayment, while others allow borrowers to repay in installments over the loan term. It is important for borrowers to understand the repayment terms and choose an option that aligns with their financial capabilities.

  6. Collateral Requirements. Depending on the lender and the loan amount, short-term loans may be either secured or unsecured. Secured loans require collateral, such as a vehicle or property, to secure the loan. Unsecured loans do not require collateral but may have higher interest rates.

  7. Accessibility. Short-term loans are often accessible to individuals with varying credit scores. Some lenders offer loans to borrowers with less-than-perfect credit, although the interest rates may be higher for such borrowers.

  8. Diverse Lending Sources. Short-term loans can be obtained from various sources, including traditional banks, credit unions, online lenders, and alternative financing providers. This gives borrowers a range of options to choose from based on their preferences and needs.

Pros and Cons

Pros

Quick Access to Funds. Short-term loans often have a faster approval process, allowing borrowers to access the funds they need promptly, which can be crucial for urgent financial needs.

Flexibility. Short-term loans offer flexibility in terms of loan amount and repayment options. Borrowers can choose loan amounts that align with their immediate needs and select repayment terms that suit their financial situation.

Build Credit History. Successfully repaying short-term loans can help borrowers build or improve their credit history. Timely payments demonstrate responsible borrowing behavior and can positively impact credit scores.

Lower Total Interest Payments. While short-term loans tend to have higher interest rates, the overall interest paid over the shorter loan duration can be lower compared to long-term loans. This can result in potential savings for borrowers.

Cons

Higher Interest Rates. One of the significant drawbacks of short-term loans is that they often come with higher interest rates compared to long-term loans. Borrowers need to carefully consider the interest costs and assess their ability to afford the higher payments.

Potential for Financial Strain. The shorter repayment period of short-term loans means higher monthly payments. If borrowers are unable to manage the higher payments within their budget, it could lead to financial strain and difficulties in repayment.

Limited Loan Amounts. Short-term loans generally provide smaller loan amounts, which may not be sufficient for larger financial needs. Borrowers requiring a substantial sum may need to explore alternative financing options.

Lack of Long-Term Stability. Short-term loans provide temporary solutions but may not address long-term financial needs. If borrowers require ongoing or extended financing, they may need to seek other loan options.

Potential for Predatory Lending. Some short-term loans, particularly payday loans, may be associated with predatory lending practices. Borrowers should exercise caution, thoroughly research lenders, and ensure they fully understand the terms and conditions before entering into any loan agreement.

Short-Term Loans

How to Get a Short-Term Loan?

Apply For a Loan

  1. Prepare Required Documents. Gather the necessary documents that lenders typically request. These may include identification proof (e.g., driver's license, passport), proof of income (e.g., pay stubs, bank statements), and proof of address (e.g., utility bills, rental agreement). Ensure that your documents are up-to-date and meet the lender's requirements.
  2. Compare Loan Offers. Obtain loan quotes from multiple lenders and carefully compare their offers. Pay attention to interest rates, fees, repayment terms, and any additional features or benefits provided. Select the lender offering the most favorable terms that align with your financial situation.
  3. Complete the Loan Application. Fill out the loan application form provided by your chosen lender. Provide accurate and truthful information about your personal and financial details. Thoroughly review the application for any errors or omissions before submitting it.
  4. Submit Required Documentation. Attach the necessary documents to your loan application. Double-check that all the provided documents are accurate, current, and meet the lender's criteria.
  5. Await Approval. The lender will review your application and documentation to assess your creditworthiness and repayment capacity. The duration of this process may vary depending on the lender's internal procedures and workload.
  6. Review Loan Terms. If your loan application is approved, carefully review the terms and conditions presented by the lender. Pay close attention to interest rates, repayment schedules, fees, and any other pertinent details. Ensure that you fully comprehend the terms before proceeding.
  7. Accept the Loan Offer. If you are satisfied with the loan terms, formally accept the offer from the lender. This may entail signing a loan agreement or providing electronic consent through an online platform.
  8. Receive Loan Funds. Upon accepting the loan offer, the lender will disburse the funds to you. The timeframe for receiving the funds may vary depending on the lender's processes, typically taking a few business days.

Requirements and Conditions

  1. Eligibility Criteria. Lenders may have specific requirements regarding age (typically 18 or older), residency, and income level.

  2. Creditworthiness. While some short-term loans are accessible to individuals with lower credit scores, lenders may consider credit history to assess the borrower's ability to repay.

  3. Loan Amount. Short-term loans usually have a maximum loan amount based on factors such as the borrower's income and the lender's policies.

  4. Repayment Period. Short-term loans have a shorter repayment period, usually ranging from a few weeks to a year.

  5. Interest Rates and Fees. Interest rates for short-term loans are often higher than those for long-term loans, and lenders may charge additional fees such as origination fees or late payment fees.

  6. Collateral. Depending on the lender and loan type, short-term loans may be secured (requiring collateral) or unsecured (without collateral).

  7. Application and Documentation. Borrowers need to complete a loan application and provide necessary documents, including identification proof, proof of income, and proof of address.

  8. Repayment Terms. Short-term loans may require borrowers to repay the loan in a lump sum or through installment payments over the loan term.

Best places to get a short-term loan

  • Avant. These are personal loans issued for 12 to 60 months. You can get annual percentage rates range from 9.95% to 35.95%. The loan funds are from $2,000 to $35,000. The minimum credit score requirement is 580. You can receive funds in one business day. However, there is an origination fee of up to 4.75%, but you will not be charged prepayment fees.

  • LendingPoint. It is a P2P lending marketplace, so you will submit an application, and the lenders will decide whether to give you loan approval. The repayment terms are 24 to 72 months. This online lender charges an APR of 7.99% to 35.99%. The personal loan amounts are from $2,000 to $36,500.

  • Upgrade. Bad credit borrowers may also opt for unsecured personal loans issued by Upgrade. The repayment period is 24 to 84 months. Annual percentage rates are between 7.956% and 35.97%. The credit limit is $1,000 to $50,000. There is a loan origination fee of 1.85% to 8.99% of the loan amount. You can receive funds in one business day.

Ways to get the money

  1. Electronic Transfer. Many lenders offer the option to transfer the loan amount directly to the borrower's bank account. This is a convenient and quick method, as the funds can typically be available within a few business days.

  2. Check or Demand Draft. Some lenders may issue a physical check or demand draft, which can be deposited into the borrower's bank account. The processing time for this method may take longer than electronic transfers.

  3. Prepaid Debit Card. Certain lenders provide borrowers with a prepaid debit card loaded with the loan amount. The borrower can then use the card for purchases or withdraw cash as needed.

Things to pay attention to

  • Loan terms. As you are looking for a short-term loan, your repayment terms will be from 30 to 60 days. This will not allow you to receive high loan amounts, and you will typically require making weekly payments or paying back one large payment to cover the total loan amount.

  • Interest rates. Your APR will determine how much you will overpay on your loan. If you have a higher credit score, you will get lower loan interest rates. However, payday loans, car title loans, and other short-term loans may have triple digits interest rates no matter what credit scores their applicants have.

  • Fees and penalties. Lenders charge origination fees for processing your loan of 1% to 10% of your loan amount. For paying your loan early, there may be prepayment fees. You might get late payment fees for being late with your fixed payments.

  • Funding time. If you need money urgently, you may get same-day funding or receive the money within one business day. Most online lenders will disburse funds quickly. However, the procedure might take up to a week if you are applying for credit unions.

Avoid predatory lenders

Once you start shopping for short-term loan lenders, you will see some of them are quite suspicious. It is especially true for payday loans. To ensure you do not fall victim to a predatory lender, follow these tips:

  • If the short-term lenders do not pull a credit report from credit bureaus and do not report your payments, they might want to take advantage of you.

  • Avoid astronomical interest rates and fees. Once you receive loan funds, your repayment terms start, along with the fees and interest you must repay. Too high interest may cause severe debt.

  • Some lenders do not state their fees upfront, and you can only see them when you take a loan or default. Hidden fees will make your loan cost higher. Make sure you know about the loan origination fee, prepayment penalties, and prepayment fees before you sign the loan agreement.

  • Some online lenders may require direct access to your bank account. This may be a checking or savings account the lender wants you to give them access to. Do not do it because the lender may withdraw funds from your account at any time.

  • Reviews and feedback will be the most helpful indicator. Check if your online lender has positive reviews and is accredited by BBB.

If you see most of these signs with the lender you want to submit the loan application to, do not take this short-term personal loan with them. Opt for credit unions or traditional lenders first, and if you are not approved, then shop for payday loans or other online lenders.

How to repay a short-term loan

  1. Understand the Loan Agreement. Thoroughly review the loan agreement provided by the lender to understand the repayment terms, including due dates, payment frequency, and any associated fees or penalties.

  2. Create a Repayment Plan. Develop a plan to repay the loan by determining the amount to be paid for each installment or on the due date. Consider your financial situation and ensure the plan aligns with your budget.

  3. Choose a Payment Method. Select a convenient payment method, such as automatic payments from your bank account, online or mobile app payments, or sending checks or money orders.

  4. Ensure Sufficient Funds. Make sure you have enough funds available in your bank account to cover the loan payments. Adjust your budget if needed to ensure timely payment and avoid insufficient funds issues.

  5. Make Timely Payments. Follow the agreed-upon schedule and make loan payments on time. Monitor automatic payments or submit manual payments before the due date to avoid late payment fees.

  6. Track Payment History. Keep a record of your loan payments, noting the payment dates and amounts. This helps you stay organized and ensures you meet your repayment obligations.

  7. Seek Assistance if Needed. If you encounter financial difficulties, promptly contact your lender. They may provide options like payment arrangements or loan modifications to assist you in managing your payments.

  8. Complete Loan Repayment. Continue making payments as scheduled until the loan is fully repaid. Settle any remaining balance promptly after the final payment.

Alternatives

  1. Personal loans are typically unsecured loans that can be used for various purposes. They offer longer repayment terms and lower interest rates compared to short-term loans.

  2. Credit cards provide a revolving line of credit that can be used for purchases or cash advances. They offer flexibility in terms of repayment and can be a suitable option for smaller, short-term financing needs.

  3. Home Equity Loans or Lines of Credit. Homeowners can consider leveraging the equity in their property to obtain a loan or line of credit. These loans generally have lower interest rates and longer repayment terms.

  4. Peer-to-peer lending platforms connect borrowers directly with individual investors. These loans often have competitive interest rates and flexible terms.

  5. Credit unions often offer competitive loan options, including personal loans, lines of credit, and short-term loans with more favorable terms compared to traditional banks.

Editorial opinion

In summary, while short-term loans can offer immediate financial relief, they should be approached with caution. Borrowers must carefully assess their ability to repay the loan, compare lenders, and understand the terms and conditions before committing to a short-term loan. By maintaining financial discipline and exploring alternative options, individuals can avoid falling into the pitfalls associated with excessive reliance on short-term loans.

Important

Keeping your Debt-to-Income (DTI) ratio below 30-40% of your monthly income is crucial. This will help you avoid potential financial problems in the future. Additionally, always assess the necessity and feasibility of taking a loan, ensuring you can comfortably manage its repayment.

How to Choose a Lender

  1. Make sure to confirm whether the lender is licensed to operate in your state. You can verify this information with your state regulator or attorney general.

  2. Check if the lender is a member of a reputable association, such as the Community Financial Services Association of America. Membership in such organizations may provide an extra level of reliability.

  3. Carefully review all the terms and conditions of your payday loan contract.

  4. Thoroughly examine the interest rates on payday loans and ensure that your contract includes a detailed breakdown of the total cost of the loan.

  5. Take advantage of your right of rescission. Usually, you can rescind the loan within three days after signing the agreement. Alternatively, there is typically a "cooling-off" period, which allows you several days to thoroughly review the contract before making an informed decision to enter into a consumer loan agreement based on the terms specified by the lender.

  6. Choosing a payday lender is a significant decision that demands careful consideration and a good understanding of how such organizations operate.

Methodology

At Finanso, we've carried out a comprehensive analysis of over 100 lenders, assessing them based on 35 different parameters across six key categories: accessibility of loans, customer relations, quality of service, interest rates, and transparency of conditions.

In each category, we carefully considered the most critical factors in selecting a lender. These factors include the interest rates, available loan amounts, minimum credit score, minimum income, application fees, and the speed at which funds are transferred.

At Finanso, we highly value our users, which is why we also focus on the quality of customer service, user reviews, and additional features that can aid our users in making a well-informed decision.

Our ultimate goal is to provide insightful recommendations and expert advice to assist you in selecting a lender that best caters to your specific needs.

FAQ

What is the best option for a short-term loan?

You can receive a loan from online lenders like Avant, Oportun, Earning, and more. If you are a credit union member, you might send a loan application there to see what loan terms you can get. The best type of loan you can apply for is a personal loan.

What is the easiest loan to get approved for?

Payday loans, pawnshop loans, and car title loans are the easiest to get approved for. These short-term loan options may not require a hard credit inquiry and have small loan amounts. The repayment terms are only a few weeks, so make sure you can afford a high annual percentage rate and can cover your payments.

What is the shortest term for a loan?

The short-term loan has repayment terms of up to 18 months. The shortest you can get is 2 weeks for payday loans and car title loans. For personal loan options, the shortest will be 12 months.

How can I get an instant loan in 5 minutes?

Small personal loans or cash advances from the cash advance apps can be disbursed in 5 minutes. However, you need to make sure the lender you apply for is legit. Do not borrow from suspicious sources, or you might fall into severe debt.

Can you get a 6-month loan?

Yes, it is possible to obtain a 6-month loan. Many lenders offer short-term loans with a repayment period of 6 months. These loans are designed to provide borrowers with a relatively quick source of funds that can be repaid within a shorter timeframe compared to traditional long-term loans.

When seeking a 6-month loan, it's important to research and compare different lenders to find the one that offers favorable terms and conditions, including interest rates, fees, and repayment flexibility. Additionally, lenders may have specific eligibility criteria that borrowers need to meet in order to qualify for the loan.