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6 Advantages of Taking Out a Short-Term Personal Loan with Bad Credit

6 Advantages of Taking Out a Short-Term Personal Loan with Bad Credit

Believe it or not, there are ways that a short-term loan can help improve bad credit. Find out the advantages of taking out short-term personal loan here.

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.

1. They Improve Bad Credit

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.

2. You’ll Save on Interest

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.

3. Ease of Access

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.

4. Reduced Stress

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.

5. Less Risk

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.

6. Flexibility

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.

Apply for a Short-Term Personal Loan Today

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.

How Wedding Expenses Pay for Themselves Long-Term: Recent Research

bride and groom holding hands in heart shape

Couples getting married today may wonder if the investment in a big wedding is worth it. And of course all kinds of family members have their opinions. And they have a point: the average cost of a wedding in the United States in 2017 was nearly $26,000. That money could go to the down-payment on a house, a superstar honeymoon or zucchini spiralizers for everybody!  (Millennials love their vegetable pastas.)

Don’t jump to thrifty Aunt Gargamel’s notion that a wedding is a waste of money, however.

Psychologist Charles Kiesler studied the correlation of weddings and long-term marital success. He found all kinds of advantages to spending for that once-in-a-lifetime celebration.

After decades of research Kiesler concluded, “commitment is strengthened when it is publicly declared because individuals strive to maintain consistency between what they say and what they do.” In other words, a big wedding with many witnesses typically leads to a drive–even a need–to follow through on the commitment. The couple says their vows in front of their community, making a pact, not only with each other, but with all the onlookers as well.

Kinda makes sense, right?

The other advantage of a having a meaningful wedding is the effect it has on the two families involved. During the run up to the event, family members and even friends of the two partners get to know each other. They work together on different projects and share their experiences with the couple. Any time more connections are made throughout our society, the better. New friends are made at weddings. New couples even form when members of the wedding party peek around the bride and groom to bat eyes at each other. We are a social species after all, and extensive research has proven that the stronger and more numerous our connections, the happier and healthier we are as individuals. Having the wedding creates a strong network for the couple to rely on as they tackle big challenges like children, work stressors and deaths in the family. This safety net is priceless.

We know: the wedding is still $26,000! And with the economic downturn of 2008 – 2012, many parents of the those getting married are working madly to save for their own retirement rather than a child’s wedding.

One way to make the price a little more bearable is to take out a personal loan that you pay off monthly for several years. A $26,000 loan at a 7% rate for a 5-year term will run a couple $515 per month. Cost-cutting couples who marry in a park and follow it up with dinner at a reasonable venue can get away with a $10,000 wedding. Amortized at 7% for 5 years, the monthly payment comes down to $198 per month. Both of these figures assume borrowers have “good” credit in the 700 to 720 range.

The personal loan at 7% is a far better option than running up credit card debt where rates run from 15% to 29%. With the money coming up front, however, couples must learn how to budget carefully and with discipline. Having a big lump sum tends to tempt even the cautious to be more loose with cash, getting those extra centerpieces or consenting to let extra people come to the wedding.

With this in mind, take these steps to stretch every penny of the personal loan you qualify for.

  • Get quotes for all venues and services up front
  • Create a spreadsheet that makes comparing venues clear
  • Use cash for the down-payments to reserve venues and vendors
  • Enter all down-payments and payoffs into a budget spreadsheet, including dates

This way, when the loan arrives in your bank account, you can quickly send it to the appropriate vendors before you’re tempted to spend it. Luckily, you have an accountability partner: your betrothed!

But this could be where it gets tough. You don’t want this exciting time to be marred by bickering and disagreement. Be ready to compromise and give up some of your own wishes. Set expectations from the beginning and try to keep it fun rather than stressful. Of course, no two people approach finances similarly. Consider even working with a pre-marital counselor to figure out how you will negotiate different decisions and the budget. That $150 (per session) will come back to you many times over.

Get a Personal Loan for a Wedding: What the Bank Wants

That you’re even reading this post indicates your sincerity about doing everything you can to plan your wedding the right way. Because you won’t need to put up any “security” (car and home loans are “secured” loans), it’s considered an “unsecured loan.” Prepare to apply online for a personal loan for your wedding when you get these documents together.

Proof of income:

  • Bank statements
  • Any and all debts you may have including student loans
  • Basic income and identity documentation such as W2’s, drivers license
  • Social Security card
bride and groom after wedding

A+ Rated First Financial Has the Low-Cost, Online Personal Loans for Your Wedding

First Financial has connected thousands of brides and grooms with low-cost personal loans for weddings. Financing your wedding with an online personal loan is smart money-management. Online lenders can offer lower cost-loans because they don’t have the bricks-and-mortar branches, labor and marketing costs traditional banks do. More, online lenders offer MORE loans to MORE applicants because, with lower costs, they can take risks on more applicants. In fact, online lenders are renowned for acceptance rates far higher than those of traditional banks.

How to Stop the Cash Advance Habit

saying no to a cash advance

Like any financial option, the cash advance serves consumers well when used properly. We reveal the best ways to manage the cash advance in our previous posts about when to use it and strategies to pay it off.

While a cash advance can help you keep your computer, car or apartment, some use a second cash advance to pay for the first and then get caught up in an ever increasing interest rate and fee cycle. This habit erodes your long-term financial health.

When you get your very first cash advance, to ensure you can pay it off, try to make these lifestyle changes:

  1. Check your credit card statements every month: too often, what an online service told you would cost $1, ends up having a subscriber fee of anything from $9 to $99 per month. They disguise this fact adeptly.
  1. Pay yourself automatically with automatic transfers from checking to savings or retirement IRA. Money left in checking is far easier to spend on unnecessary items.
  1. Schedule a time to take a “money minute:” monitor expenditures for the day. Check each account each day.
  1. Establish an effective spending “mantra.” This can be “I spend only on essentials” or “I treat myself with walks, books from the library or time with friends. . . not new clothes or furniture.” When we articulate our values, we feel guilty when we do not abide by them. Create a specific spending mantra to remain in control.
  1. Let a friend know about your money goals. Go an extra step and ask them to check in with you about how well you’re meeting these goals. Knowing you’re accountable will help you avoid spending.

While the cash advance does come in handy in many situations, before applying for a cash advance, make sure you can answer the following questions positively.

  1. Can you pay the money back at a designated date?
  1. Is the cash advance your best or only alternative?
  1. Do you really need what you want to buy or pay for (like cars, living arrangements, computers that keep you earning?)

Break the cash advance habit to save

A+ Rated First Financial Gets You Money without Eroding Your Credit

When considering personal loans, don’t forget that online lenders have the automation and reduced overhead to offer the best loans and terms. First Financial is the national leader in providing cash advances for borrowers of all types, even bad credit borrowers. Just fill out some forms, upload documents and get the money in your account in a matter of days. The Better Business Bureau rates First Financial A+ because we make customer service our highest priority.

 

 

Escape Credit Card Debt: Debt Settlement or a Personal Loan?

Cutting credit card to get personal loan

Many consumers have received phone calls explaining that they can settle their credit card debt for a fraction of its total. While this is possible, taking the debt settlement route can have negative consequences on your long-term financial health.

Debt settlement works this way:  a company acts as an intermediary, making calls to your credit card company or another creditor for you.

The personal loan, on the other hand, is simply a lump sum of money you win from a bank or alternative lender after filling out an application form and submitting some financial documentation.

But to further guide you in deciding which path to take, here are the risks and rewards of debt settlement versus the personal loan.

Risks of Debt Settlement

Debt settlement comes with the following potential risks.

  1. Credit Damage.

A debt settlement company negotiates with your creditor to demand less money that what you actually owe. Your creditor, in turn reports this event to the credit bureau, explaining in detail that your debt was settled for less than how much was owed. Credit bureaus degrade your credit score.  Further, seeing this history future car, home and bank lenders will be reluctant to do business with you.

  1. Implications on taxes.

The money you escaped paying isn’t the free pass debt settlement companies imply. The IRS will demand a slice of this “discount” in your taxes. You will pay taxes on it as if it is income. Your debt settlement company sends information to the IRS and to you. In fact, if you do choose to use a debt settlement company, make sure to ask up from what the tax implications are.

 

Rewards of Debt Settlement

Debt settlement does help consumers reduce their debt. Also, when you try of applying for a loan when you still have not fixed your debt yet, you are certainly going to have a hard time. As a matter of fact, lenders are highly unlikely to be willing to work with you if this is the case. But when you do eliminate your debt, you will be attracting more lenders to work with you and even open up a lot of other opportunities for your own success.

  1. Save more money.

Giving your lender a lesser amount of the amount owed leaves more money for you to use to buy a car, home or other asset. Make sure you maximize the amount forgiven you will only be successful in this when you have already mastered the labyrinth of debt settlement.

  1. Put an end to the collection.

Aggressive creditors can make your life a nightmare. Even more frightening, when you do not respond, they file a lawsuit which could be served in public and end up garnishing your wages. Debt settlement puts this interference to a stop.

 

Risks of Personal Loan

  1. High interest rates.

Many are surprised that personal loan rates are typically sometimes twice as high or higher than home and auto loan rates. The better your credit score, the lower rate you will get. Still, those with personal loans pay a lot of end their creditors calls.

  1. Penalties for early payoff.

Some lenders charge high penalties if you pay the loan off early. Make sure to read the terms and regulations of the contract or ask your loan officer. First Financial personal loans never have penalties for early pay off.

  1. Complications that are unnecessary.

A personal loan should be simple:  you apply for a personal loan, the company pays for your debt, and in turn, you will be going to pay the company. View additional fees or meeting with bankers with suspicion.

Rewards of Personal Loan

  1. Improved credit score

The thing about having a personal loan is that it can pay off your credit card debt in no time. The credit bureaus also see this move as a commitment to pay the debt rather than escape it by going into debt settlement. This move reveals your habits of paying your debts and impresses lenders.

  1. No risked property.

A personal loan does not require property for collateral. Therefore, if you do default on it, you aren’t at risk for foreclosure or repossession.

A+ Rated First Financial Personal Loans for Borrowers of All Types, Even Bad Credit

When considering personal loans, don’t forget that online lenders have the automation and reduced overhead to offer the best loans and terms. First Financial is the national leader in providing personal loans for borrowers of all types, even bad credit borrowers. Just fill out our simple application form, and get the money in your account in a matter of days. The Better Business Bureau rates First Financial A+ because we make customer service our highest priority.

 

Cash Advances: 3 Best Times to Use Them

Even though people love their plastic debit card, cash still serves in many situations. For years, groups have lobbied for the end to the penny and even the nickel. The American people won’t have it. Cash is convenient. It makes discounts possible. Many times, it even makes sense to get a cash advance.

Cash Only Transactions

With Craigslist, Close5 and more consumer to consumer marketplaces gaining in popularity, sellers tend to want cash. Considered, the most convenient mode of payment, they also unlock discounts. Stores that don’t take credit cards (yes there are some!) can put you through the wringer if you’re trying to write a check. Handing over cash just makes everyone happy.
Sometimes, too, vendors have a credit price and a cash price, with the cash price coming in 10 to 15% lower than credit or debit. We’ve run into this at small, independent auto and computer repair shops, as well as thrift, pawn, and antique stores. Many pet breeders also insist on getting cash.
If you’re able to pay off the cash advance within the month time frame, using a cash advance to get what you need makes sense.

To Capture an Immediate Opportunity

When an individual or company is selling something that many want, a buyer can stand out from competition by offering cash. Industries that respond well to cash offers typically include real estate, automotive, antique and jewelry.
Having cash on-hand can be smart when you’re going to shop at thrift shops, swap meets, antique stores and more. Be it from being able to have discounts off your favorite goods to grabbing an opportunity that otherwise unattainable.

Lending to a Loved One

It can be tough to lend money to family member or friend because you run the risk of not getting it back. Your borrower, particularly when struggling, may quickly put you at the bottom of the repayment list. This leads to resentment and a loss of trust.
One way to offload the responsibility is to use a cash advance and make it clear what the interest rate is and your debt to the lender. This can add the pressure to your borrower to make sure that he pays the money that he owes. This way you would be quite sure that he is certainly going to pay you back.
A very good example of this would be a typical home scenario wherein the son, employed but without a credit card, goes to you as his parent for help buying something he cannot afford in his monthly salary. To teach him a lesson about paying on time and paying regularly until such time that the debt is fully paid, make sure he understands that you will have to pay the debt soon. Even 20-year-olds need financial lessons.

Trust A+ Rated First Financial Secure and Speedy Cash Advances to Get You What You Need!

When considering a cash advance, don’t forget that online lenders have the automation and reduced overhead to offer the best loans and terms. First Financial is the national leader in providing cash advances for borrowers of all types, even bad credit borrowers. The Better Business Bureau rates First Financial A+ because we make customer service our highest priority.


First Financial

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