If you’re here on an article with how to apply for short-term loan as a title, then chances are you’re quite new to the loan scene and you have no idea how everything works in this world. And that’s all well and good because honestly, school doesn’t teach you as much as they probably should’ve about these sorts of things.
But, the internet’s here to help you. Applying for a loan can be difficult, after all. So, we hope that after reading our guide on how to apply for short-term loan, you’ll find yourself confident and hopeful about getting that loan that you need right now.
Qualifying for short-term loan
As you can probably guess, the process on how to apply for short-term loan takes many, many steps before you could get one for yourself. The first one being deciding whether they’re the type of loan for you.
For example, if the reason you’re getting a loan is because you want to remodel your house or get a car. Another type of loans such as home equity loan or auto loan may be better suited for you.
And unlike short-term personal loan, these two types of loans above are secured by the property that you want to buy or remodel such as your house or your car.
Deciding how much to borrow
Second step on how to apply for short-term loan is to know how much you want to borrow from your lenders.
Borrowing a money from a loan don’t just mean that you only have to pay the original loan amount. There are fees, interest, and charges that’s always accompanying a loan whatever type it is. This is especially important if you want to apply for short-term loan.
Read: short-term personal loan
Why? Because short-term loan often has higher interest rates than usual. There’s no reason to pay interest, especially higher interest for a money that you don’t really need per se so only borrow what is necessary and nothing more. If what you need is $1,000, then only borrow $1,000 and don’t borrow $1,500 when you don’t even need that $500.
It’ll only cost you money for something that you don’t even need.
And lastly for this point, make sure that you’re able to afford the payment when the due date to repay your loan comes. There’s nothing worse, especially for people just starting with the loan business to keep extending their loan over and over again and overextending themselves financially instead of just waiting.
Credit Score is Very Important
When you want to apply for short-term loan, or any loan in general, do not ever underestimate the worth that your credit score has. This point should already be obvious without being said, but there are people who don’t pay attention to their credit score and in turn they have to pay a hefty price for it, quite literally.
Check your credit scores and get an updated report from each of the three major credit bureaus available in the U.S before you apply. There’s no need to worry about this procedure affecting your credit score either, since these are all grouped under the soft-inquires that don’t affect your credit score.
You can obtain free credit reports from each of the three credit bureaus every year by visiting sites such as annualcreditreport.com. Even better, many credit and loan companies provide free monthly credit score from one or more credit reporting agencies.
So, there’s no reason you shouldn’t be doing these procedures in order to get better rates when you finally apply for short-term loans.
Are you eligible for personal loan?
Before going in with the decision to get the loan that you wanted, visit your lenders’ website or make phone calls to be informed whether you’re eligible for their service or not. As we’ve said above, credit score is very important, so find out if there’s a minimum credit score required to be eligible, too.
Other than those two factors, there are also things like an income threshold that could come up as one of the requirements for you to be eligible for their loan.
So, yes while it is an arduous and lengthy process, it’s always better to know in advance before you apply for short-term loan instead of getting disappointed midway when you’re not even eligible for the loan you’re getting.
After you confirmed that you’re eligible to apply for short-term loan from the lender of your choosing, know that many lenders offer a prequalify or preapprove with a soft inquiry that won’t affect your credit score.
Prequalifying doesn’t necessarily mean you will get the loan, but it will at the very least you get to find your whether you have a chance to be approved for that loan lender or not.
Prequalification by itself usually requires you to fill out a short form online where you will provide your name, address, income and the amount of loan you’ll be borrowing.
If you think any of these are information that you don’t want to give out willy-nilly, we completely understand that, and the what you can do is to of course research the lender extensively. If what you’re doing is apply for short-term loans, then chances are they have a website available online where you can find out more about.
There’s also tons and tons of reviews websites that lets you know whether a lender can be trusted or not. Some of our favorites include NerdWallet, The Balance, and BankRate. If you’re unsure about something, check their website for reviews of the lender that you will be choosing.
If you don’t find your lender in their reviews, then chances are they’re something shady and it’s good for you to not send them that information above.
And that’s all we could tell you to prepare when you want to apply for short-term loan. It’s an arduous process, and it can be very scary too since you’ll be in debt for some quite of time. But there are resources online like this article that you can use as your guidepost so that you’re not lost trying to get that loan that you need right now.
Thank you from taking the time out of your day to read our article. We hope you find it useful and we’ll see you another time with another article involving cash loans and other similar topics. See you.