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Over 43 million Americans have bad credit.
If you have bad credit, you might think you are stuck in a never-ending cycle. You need good credit to be approved for a loan, but you need to be approved for loans to build your credit.
If you can get approved for a loan, the terms are usually less than favorable.
Fortunately, there are ways to improve your credit quickly and easily. One option is to take out a short-term personal loan.
These types of loans come with many benefits and few disadvantages. They can help build your credit and don’t come with the tradeoffs that bad credit loans usually do.
Keep reading to learn more about the benefits of short-term personal loans.
Short-term personal loans allow you to have your cake and eat it too.
Most loans that those with less than stellar credit are approved for aren’t worth taking. The cost is often too high to the borrower.
And that’s if you can even get improved.
So if your credit doesn’t qualify you for a loan, how do you build your credit? This is where short-term loans come into play.
Short-term loans are less risky for the lender and the lender can expect to be paid back more quickly than with long-term loans. Short-term personal loans are customizable by the borrower.
This means you can choose a loan that works for you. If you simply want to use this type of loan to improve your credit, you can take out a loan for a few months.
So long as you repay the loan within the agreed-upon time frame, your credit score will improve.
For the most part, short-term loans will save you money.
When you have a long-term loan, you end up paying more interest. This is simply because you will be paying interest for such a long time.
With short-term loans, you pay back the loan in a much shorter amount of time. This means you’ll pay less interest.
Even if the interest rate for the short-term loan is higher because of your bad credit, the interest paid will be less in the big picture because of the shorter time paying interest.
The loan amount might also be smaller, meaning the interest paid will be less. Short-term personal loans usually have much lower interest rates than credit cards.
If you need a loan quickly, a short-term personal loan is the loan for you.
They are similar to payday loans in the fact that they are usually approved within just hours. Waiting to find out whether you will qualify for a loan can be torture, especially if you aren’t sure if your credit score will measure up.
While it depends on your lender, in most cases you will receive your funds either the same day or the next business day. This offers a level of convenience that is unique to the type of loan.
Short-term personal loans offer convenience and flexibility to the borrower. As mentioned above, the loans can be customized to fit your individual needs.
Most lenders are online and you can access their website 24/7. This means you can apply for a loan at any time and from anywhere.
Short-term loans are significantly less stressful than long-term ones.
You will avoid the dread of viewing your statements and continuously accruing interest for years at a time. Instead, you’ll see your loan being paid off quickly, boosting your confidence and your credit score.
When you have a long-term loan, the end is often not in sight. It’s easy for the looming loan to cause emotional stress.
Watching the interest accrue month after month and year after year can be downright torture. Even if you are making the minimum payment each month, you are barely making a dent in the principle.
Short-term loans avoid this problem and instead offer satisfaction upon repayment.
With short-term personal loans, you’ll know exactly how much you owe each month and for how long you will need to make payments.
These loans are sometimes offered unsecured as well. This means that you won’t have to put up collateral.
Common forms of collateral include personal assets like your home or car. Instead, your credit history and credit score will be enough for your lender.
If you have bad credit, you might be required to put up collateral. However, short-term loans are much easier to manage.
There is less risk of things getting out of control and you not being able to pay back the loan. As mentioned above, it’s easier to keep interest in check with short-term loans.
Therefore, your assets are at less risk. If you do end up going with a secured loan, you will have access to more favorable terms and lower interest rates.
Short-term personal loans offer you more time to pay than other fast cash options.
Payday loans, for example, have much shorter payback time frames. With short-term loans, you can set the repayment time frame so that it works with your life’s schedule.
You will also have more flexibility when it comes to choosing the amount of the loan. Borrowing limits are often significantly higher than you could borrow using a credit card.
If you are looking to secure a loan with bad credit or improve your credit score, considering applying for a short-term personal loan. Your loan will help you establish good financial habits.
Click here to start your application to see if you qualify.
If you have an online business, accepting credit cards as a form of payment is absolutely critical to your success and your bottom line.
But if your business is considered high risk, finding the right match can be a daunting task.
So, what do you need to know about having a high risk merchant account before you begin looking for the right company to serve your needs? Here are nine things you should be aware of before you make a commitment.
Before you select a merchant processor, you need to know if your business is even considered to be high risk. The criteria can vary widely between providers, but one of the first things they look at is if your industry typically has a high rate of fraud or chargebacks.
If you’re not operating from the United States, this is another potential indicator of high risk. Certain categories like firearms, drug paraphernalia, or even auction sites may also be considered high risk. Find out if you fall into this category first so you can be prepared for the next steps.
If you have a high risk merchant account, you can expect to pay more in processing charges and billed account fees. The reason is that your processor is taking you on as a risk, so they’re passing the cost of that risk on to you.
You’ll also likely have to keep your contract with the processor longer than you would if you were not a high-risk client. On average, high-risk accounts must stay with the same processor for three years or even longer.
An auto renewal clause is usually included which can force you to remain an ongoing customer for periods of a one-year minimum after each renewal. If you want to cancel, you’ll likely get hit with an early termination fee.
Merchant processing plans can vary, so shop around until you find one that offers terms you can live with. Traditionally, these fees are charged on something called an interchange-plus pricing plan, although your rates will be higher than a low or no-risk account.
Find out if you can get a flat-rate pricing plan which will make billing a lot easier. If you discover that a merchant processor is charging extremely high per-transaction charges, you may want to steer clear. Compare rates and plans until you find one that’s within a reasonable amount.
The term rolling reserves refers to money that is set aside from the proceeds of your sales in order to cover certain expenses. These reserves will help pay for things like chargebacks, and they’re put in place to protect the merchant processor.
Since many high-risk accounts tend to go out business, these reserves are there to cover any unexpected costs to the merchant processing company. If you’re new in business, you can almost guarantee that this is a requirement. However, as time goes on, the rolling reserves should decrease as long as your account remains in good standing.
Any reputable merchant processor will give you a contract that spells out all of your fees and terms. Make sure you read this thoroughly before you make a commitment.
Look closely for different clauses that could cause you to pay even more than you expected. Some companies claim to specialize in high-risk accounts so they feel that they can charge their merchant accounts exorbitant fees. Do your homework and never sign anything until you’re completely comfortable with the terms and the cost.
If you’re ever in doubt about a potential merchant processor, ask your fellow business owners who they recommend. You can also read reviews online to find out which ones most high-risk customers are happy with, and which ones to avoid.
A quality payment processor will add some layers of additional security to your account. This can actually benefit you since it will help prevent fraudulent transactions and dishonest chargeback claims.
Requiring things like CVV2 verification is a good thing since it protects you and your processor from fraud. Ask your provider about what kinds of security measures they take to protect themselves and your business from unscrupulous transactions.
If you really want to lower the costs associated with a high risk merchant account, work diligently to prove your salt. This could mean anything from reducing or completely eliminating chargebacks to consistently showing a profit for a long period of time.
The longer your business does well and maintains its reputation, the better off you’ll be in the eyes of the merchant processor. Some providers may even reward their high-risk accounts with lower rolling reserves over time or even reducing fees as time goes on.
Ask several potential merchant processors what kind of benefits they offer high-risk accounts if they do well. You might be surprised at the progress and positive benefits you can reap once the business is more established.
Even if you operate a high-risk business, there’s no need to despair. With a few helpful bits of information and a little research, you can find a quality high risk merchant account that will serve your needs well.
Visit our website for more information about: High Risk Merchant Services.
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