US Short Term Loan Market
Borrowers have discovered how applying for a short term loan can be used as an economic opportunity. They don't have to be financially educated to learn the basic principles of borrowing and lending. With a short term loan, disadvantaged borrowers are given a chance to improve their economic condition by exercising financial responsibility. The lenders consider new borrowers to be an unsafe investment. Therefore, to protect their investment, a borrower may be given a slightly higher interest rate and tougher loan terms. A short term loan provides a borrower with fast cash and a shot at establishing credit history. In most cases, a borrower who pays back their first loan successfully without being penalized can be awarded with a nice boost to their credit score.
Short term loans are small dollar loans, usually less than $1,000, that offer borrowers the cash they need to finance next month's rent, groceries, or an upcoming bill. They are commonly used to avoid being charged late fees or charges on existing debts and liabilities. This type of payday alternative provides the working capital a borrower needs to manage their budget, with a quick repayment schedule. The shortened loan period and small loan amount allows the borrower to remedy their temporary cash flow problems within a year.