Need a Loan Today? Consider These Options for Short Term Loans

February 18, 2012 by  Filed under: Loans 

So there you are. You are sitting at the kitchen table with your hands in your face while you are staring at a pile of bills and receipts. So what do you do? Do you need a loan today or do you just need to increase your income so you can actually pay all of your bills at the end of the month? And the answer is both. Raising you income will solve your long term problems, but right now, you need money in hand, right? I have been there just like you with a mountain of bills and not enough money in my checking account to pay them all. I needed money right now but I was unsure of what my options really were.

Two Basic Choices for a Short Term Loan

Firstly you have secured loans. This type of loan requires that you put something up of value that guarantees the loan if you don’t pay it back. This security is called collateral by the lenders. A basic example of this type of loan would be a mortgage. If you don’t pay your house payment, after a while the bank will repossess it. Even if it does take them several months like it does these days. It’s as simple as that.

The next type of loan is an unsecured loan. This type does not require collateral, but it does have a guarantee of another kind that goes along with it. And that guarantee is the reputation of the lender. In the financial world, a person that has a good reputation also has good credit. That means that this person pays his bills on time, every time and has done so for years.

So which kind is right for you?

Well that all depends on your situation. If you have something of value, like a nice gold watch, then you should be able to borrow some money against it. This is called pawning and it is a type of secured loan. People have been pawning items for thousands of years. It’s simply the world’s oldest form of lending. The premise is simple. You give the pawn broker your watch, they loan you some money and expect that you pay it back after the agreed amount of time. If you don’t pay it back, they keep your gold watch! Yep, couldn’t be simpler.

So what if you don’t have anything of value?

If you have a job, you have something that is valuable. A steady job means you have a steady paycheck and that has a lot of value. And in case you didn’t know, you can borrow against a paycheck that you haven’t gotten yet. This type of borrowing is called payday or cash advance loans. These loans can get you in a lot of trouble if you are not careful. They usually have high interest rates and fees and have a negative reputation in the general public. Payday lending is a type of unsecured loan.

So how do these loans work?

In the old days you wrote a post dated check to the lender, and after two weeks, they cashed it. Today, you give the lender access to your checking account directly. And after two weeks, they take the money out. If there is not enough money there, then they wait until there are funds available and take it out then. Yes, that sounds scary. And this type of lending should be avoided by most people.

If you your bills are becoming overwhelming and you need a loan today, make sure that you understand all of our options so you don’t find yourself in an even worse situation. Visit and see for yourself how to choose a loan that will meet your needs without putting yourself in a bind.

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