The best laid plans of mice and men often go awry, or so they say. We know that the need for extra funding can pop up in any season. That’s where a loan comes in. There are many types of loans and not all are right for every situation. Sometimes a short-term loan may be preferable to a long-term loan, for a myriad of reasons. To find out if a short-term loan is right for you, consider these factors.
A short-term loan is similar to a traditional long-term loan in that it is a sum of money paid back over a certain amount of time with a particular interest rate. They differ because short-term loans usually reach maturity in a year or less where long-term loans can take decades to reach maturity.
With short-term loans there is also less worry about having long-term debt because the loan is repaid so quickly. And while big banks usually only offer traditional loans, credit unions are able to offer short-term loans to their members.
Short-term loans are often a great option for paying for unexpected needs, like frozen pipes that burst in the dead of winter, or a HVAC unit that needs to be replaced.
There are other benefits, including the improvement to your credit score after paying a short-term loan, because of how quickly the loan is paid. If your credit score could use some help, the short-term loan is a good bet.
If you think a short-term loan is the right move for you, contact your local credit union for more information.
