How to (Responsibly) Get Money Fast When You’re in a Bind

We’ve all been there, those days when you’re not sure you’ll be able to make rent, or your car breaks down, or a wild pack of squirrels eat into your home’s central heating system. Those days suck, but the good news is: You do have options to access money fast, and you can get it without fear of being in eternal debt or ruining your credit score.

And no, we’re not talking about signing your life away at sketchy payday loan businesses or selling your body for medical tests. If you need quick access to funds for a personal emergency, you may find that short term loans are a good, safe option.

In this article we’ll discuss when short term loans are (and aren’t) a good idea.

Short term loans are — you guessed it — minor loans that are expected to be paid back quickly, usually within the year. They’re similar to payday loans, but with much lower interest rates and are usually offered by more reputable banks and credit unions. Plus, you can get one in a matter of minutes. Here’s what you need to know if you’re considering applying for one:

They’re easy

Also known as instant loans, these fast cash options usually offer borrowers the money they need within minutes of applying. At banks like Mountain America Credit Union, instant loans can be applied for online or through a mobile app at any time, day or night. It only takes about 10 minutes to apply, and the application is handled electronically without the need to speak to a loan officer or agent, which is a discreet alternative to meeting with loan sharks.

This makes them ideal for a home emergency, medical crisis or other unexpected event, rather than credit card debt or student loans.

They save you money

Loans can be a scary concept, especially for those who have seen enough film noir or mafia movie. Payday loans can charge anywhere between 196–600 percent in interest fees and often have hidden clauses in their contracts that can be difficult to work around. Plus, dragging out debt and accruing interest fees can leave anybody in a deep, dark debt hole with no easy way to get out.

Short term loans, on the other hand, charge interest rates around 28 percent. That means you pay up to thousands less in interest fees and get back on your feet quicker, protecting your finances and credit score from future damage.

They require some research

Not all instant loans are created equally. Some have tricky fine print that can set you back thousands if you miss a payment. Experian recommends borrowers shop around for the best interest rates and terms, read the fine print in the loan contract and make each and every one of your payments on time. A late or missed payment could result in a negative impact on your credit rating, hefty overdraft fees, credit collection calls and harassment, and even legal action.

When a short term loan isn’t right for you

While an instant loan can help you through a difficult period, there aren’t always the right choice. A short term loan likely isn’t the right choice if:

You don’t have the means to pay it back

While a 28 percent interest rate is much more manageable than many exorbitant payday loan rates, it still tacks on a significant about to your debt owed. Only take out a short term loan if you are certain you’ll be able to repay the debt quickly and in full, such as the next time you’re paid.

You’re trying to build credit

Because most short term loans aren’t reported, you won’t build your credit score by paying it back, as you would with a long-term loan or a credit card bill.

All that being said, almost everybody has a financial emergency at some point in their life that requires cash on hand. If this happens when funds aren’t readily available, consider a Mountain America instant short term loan.

Elements used to create Featured image Artwork provided by Created by Jill.

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