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Best Short-Term Loans In 2025
Are you looking for a convenient short-term loan for your emergency expenses? BadCredify has compiled the top five selections for the best lenders that provide short-term loans.
We’ve also described the factors that should be considered when you apply for short-term personal loans.
Best Short-Term Personal Loans For Fair Credit In 2024
What are Short-term Loans?
Short-term loans don’t have a specific definition, but generally, they are personal loans with shorter repayment terms. The typical repayment period ranges from 6 to 36 months. However, short-term loans may have even shorter terms, depending on their type.
A short-term personal loan may have higher monthly payments, but the borrowers will pay less interest than they would pay with a long-term option.
How Does a Short-Term Loan Work?
Short-term loans work as simple as the other loan products. Here is the loan process described:
- Application. You apply online or offline by providing the needed information about you and your bank account and submitting the loan request form.
- Loan approval decision. A lender typically needs about 1 hour time to review your loan request and send you an approval decision. The process may involve a hard credit check.
- Loan agreement. If approved, you review the loan offer, and if you agree, sign the loan agreement.
- Personal loan funding. After all formalities, the lender funds the money in a lump sum in your bank account.
- Payback process. During the set repayment period, you make monthly payments until you cover the borrowed amount plus interest.
Short-Term Loan Rates & Terms
Short-term loans usually have lower interest rates compared to options with longer repayment periods. Their APRs commonly range from 5.99% to 35.99%, depending on a borrower’s creditworthiness. Additionally, such products come with less interest accumulated over their life due to short payback times.
Still, some options tailored to bad credit borrowers may come with very high APRs that exceed 400%. These loans require full repayment within just a few weeks and need to be considered only as a last resort.
Let’s take a look at hoe much you can expect to pay for a short-term loan of $2,000 based on its APR and repayment period.
| APR | Repayment Period | Monthly Payment | Total Cost | Total Interest |
|---|---|---|---|---|
| 8% | 6 months | $341.15 | $2,046.93 | $46.93 |
| 8% | 18 months | $118.28 | $2,129.05 | $129.05 |
| 16% | 6 months | $349.06 | $2,094.36 | $94.36 |
| 16% | 18 months | $125.71 | $2,262.83 | $262.83 |
| 21% | 6 months | $354.05 | $2,124.27 | $124.27 |
| 21% | 18 months | $130.49 | $2,348.82 | $348.82 |
These are illustrative averages provided for a better understanding of the factors that may affect your total cost of borrowing. You can use our loan calculator to determine your particular loan cost and find out whether your potential monthly payment fits your budget.
Loan calculator
ESTIMATED MONTHLY PAYMENT
TOTAL LOAN AMOUNT PAID
TOTAL INTEREST PAID
TOTAL COST OF LOAN
How Can I Get Short-Term Loans Online?
To borrow short-term loans online, you must apply on the lender’s website and meet the eligibility criteria that may vary. However, the basic requirements include:
- Provide a valid email address and phone number.
- Be 18 years old or above;
- Have a steady monthly income and a bank account;
- Prove your US citizenship or permanent residence;
Pros & Cons Of Short-Term Loans
Pros
- Perfect for emergency major expenses;
- Easy loan application process;
- Wide range of available loan amounts;
- Lower total loan cost;
- Less time in debt.
Cons
- Higher monthly payments;
- Potential predatory lending practices.
Other Types of Short-Term Loans
Short-term loans come in various forms. Here are the common options that could help you cover your emergency expenses:
Payday Loans
A payday loan is a short-term cash loan you borrow from a payday lender and repay on your next paycheck. The available loan amounts range from $100 to $1,000, repaid in a lump sum, not with fixed monthly installments as a personal loan.
Usually, a payday loan term varies between seven and 30 days. While payday these loans come with easy-to-meet eligibility requirements, they may have high interest rates of over 375%.
Payday lenders usually don’t check your credit report through major credit bureaus. But you must prove your income with pay stubs to qualify for payday loans.
Credit Card Cash Advances
A credit card cash advance is a loan you get from your credit card. The available loan amounts depend on your credit limit. With a cash advance, you simply withdraw the sum you need from your credit card balance without undergoing any application or verification processes. However, an interest rate accrues immediately and is usually higher than that on regular purchases.
Merchant Cash Advances
A merchant cash advance is a type of financing for small businesses. With its help, a lender gives a borrower the required loan amount upfront, and a borrower repays the sum using a percentage of their debit and credit card sales, plus a fee.
Car Title Loans
These loans are borrowing options that use your car to secure the loan. With their help, you can borrow a portion of your vehicle’s value. Its advantage is that you’re allowed to drive your car while you make the car title loan payments. These short-term secured loans are also good for bad credit borrowers, but they will carry higher interest rates and risk of losing the car in case of default.
Line of Credit
A line of credit (LOC) provides you with a predetermined borrowing limit that may be used at any time. You may withdraw funds as needed until the limit is met. In the event of an open line of credit, money can be borrowed again as it is returned. You can withdraw money from the LOC at any moment and only pay interest on what you use, not on the entire limit.
How to Choose the Best Short-Term Personal Loan?
Finding the best short-term personal loan might be challenging, but don’t worry. BadCredify provides you with several tips and tricks to find a convenient loan product for you:
- Find a suitable lender. Not all loan providers offer cash loans with shorter repayment terms. Shop around and find companies that have both favorable terms and convenient repayment options.
- Check the interest rates and additional fees. Compare APRs, origination fees, and other charges and penalties a lender may apply to better understand the exact loan cost.
- Choose a convenient repayment period. The shorter repayment terms, the less interest you’ll pay over the loan life. A longer period comes with a lower monthly payment, making your loan more manageable.
- Consider the speed of funding. Every lender has its funding times; find a lender that transfers the money within a period that suits you.
- Verify the repayment method. Usually, most lenders have automatic payment options. They just withdraw the due amount from your checking account on the maturity date. It helps you avoid missing payments and late penalties.
Why BadCredify
BadCredify does its best to help people make informed financial choices. Our platform allows you to compare loan terms fast and easy. All you need is to fill out a simple form and access multiple offers from loan providers who are ready to deal with you. We also provide borrowers with smart financial advice, debt management tips, personal finance guides, and fair lender reviews to help them better navigate the process and reach their financial goals.
Our website allows you to speed up the process of finding the right lender and receiving the funds, which is especially important in emergency situations. We stand for inclusivity and observe loan options for borrowers with any credit and financial situation. Thus, we help people find reasonable financial solutions regardless of their past financial mistakes or temporary money problems.
Frequently Asked Questions
Can I build my credit with a short-term loan?
If the lender reports your monthly loan payments to the major credit reporting bureaus, paying on time can improve your credit history. On the other hand, if you miss the payment, it can negatively affect your credit score.
How much does a short-term loan cost?
It depends on the loan type you get. Usually, the interest rate may vary from 7.99% to 35.99%. Plus, there can be additional charges, such as origination fees of up to 10%. Loan options for bad credit borrowers may come with higher APRs.
What is the shortest term for a personal loan?
It depends on the loan type you borrow. For example, the shortest term for a payday loan is two weeks, but for a personal loan, it is six months and above.
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