What are short term loans?

A short term loan are loans repaid in a period of less than a year; sometimes less than a month. Short term loans can be offered by different types of lenders. Besides Payday Advance companies, they can also be offered by colleges or banks.

Some short term loan examples:

College Loans: Some colleges may provide short term loans for students. The conditions of these loans usually ask that the loan can be payed back in a limited period of time, around 60 days. The college may lend a higher amount of money only if the student is expected to receive money from other sources like a Student Loan or Student Aids.

Payday Loans: Payday Loans are unsecured loans given to a borrower against his next paycheck. Generally, they are small loans, between $100 and $1500, for a two week term. They may also have extra fees and penalties for delay of the repayment of the loan.

Bank Loans: The banks may offer short term loan over a period of 60 to 120 days, but these type of loans can mature up to one to three years depending on the bank and the amount of money borrowed. For larger sums of money, they may ask for collaterals and the process of application can last longer. In this case, the bank will check your credit history or credit scores, but the advantage is that they offer short term loans for a lower APR than a payday loan service.