Short-Term Loans – The Ultimate Guide


We all agree that money is a necessity. Money can give us the power to have the minimum requirements of daily living. It is a fundamental inclusion in every person’s survival kit. Having It enables us to provide for our family and enhance our children’s lives through education and the health care. It allows us to buy our needs and wants and even to go to places we want to visit and explore. Sometimes, short-term loans can help in these necessary situations.

An emergency, unforeseen expense, or opportunity may occur where you need extra money. You can borrow from a friend, a family member, or even your bank. But what if your colleagues are not financially capable and your bank denied you credit? What if you already have a so-so, challenged, or bad credit score? Whether you need a loan for your personal expenses or you are in need of assistance for a major purchase, you can overcome your financial worries with short-term loans. 

What are short-term loans?

A short-term loan can be a way of managing unexpected situations without taking on long-term debt. It is a type of financing in which you borrow money from a lender and pay the principal amount along with the interest in a year or less. It is a great source of quick cash when you are running out of cash flow options, and since its credit limit is often lower than than the traditional line of credit, it is an attractive option for entities or individuals who are not yet eligible to apply for a line of credit from a bank.

Short-term loans are named because of how quickly they need to be paid off. Compared with typical loans, short-term loans do not designate a specific payment schedule or a specific due date, hence allowing borrowers to have flexibility of paying their loan at their own pace. Ideally, borrowers must pay their balance within six months up to a year or 18 months at most in some cases. Loans with payment terms longer than that is already considered a medium-term or a long-term loan.

What are the types of short-term loans?

Depending on an individual’s financial needs, there are plenty of short-term loans you can avail from a trustworthy lender. Here are some types of short-term loans you must be familiar with if you are interested in getting one:

  • Lines of Credit

This type of short-term loan is comparable to business credit cards. Depending on your lender’s assessment and evaluation, you will be allotted a specific amount as your credit limit where you can pull money from in case you need it. In essence, the amount of money you can tap basically depends on the credit limit allocated to you by your lender. 

In a line of credit, the borrower makes monthly installments against the total amount borrowed. One advantage of availing a line of credit over a business credit card is that the former charges a lower annual percentage rate. If you do not immediately need your lump sum or you want to control the money in your account, then a line of credit might be a good option for you. 

  • Merchant Cash Advance

This type of short-term loan is a B2B type of funding. As the name itself suggests, the system works like a cash advance but is technically considered a loan. The lender loans the amount of money needed by the borrower. The borrower then makes payments by allowing the lender to access the former’s credit facility. Each time a customer makes a purchase through the borrower’s terminal, a percentage of the sale is directed to the lender until the amount borrowed is repaid in full. 

  • Payday Loans

This type of loan is often granted to those who have a bad credit standing or a non-existent credit score where the borrower is required to have a steady income and a bank account. Payday loans are relatively easy to obtain, but repayment should be made as a lump sum on the arrival of the borrower’s next paycheck. In most cases, the borrower gives the lender permission to draw money from the former’s bank account when repayment is already due. This automatic payment is called continuous payment authority.

  • Online or Installment Loans

Like payday loans, online or installment loans can be comparably simple to get. An individual or a small business just needs to meet minimum requirements and submit an application online. The loan provider then assesses the application remotely, and once the request for loan gets approved, the lender wires the borrowed amount directly to the borrower’s bank account. This type of short-term loan is probably the most hassle-free way to borrow money. 

  • Invoice Financing

Invoice financing is when a business borrows money from a lender against the amounts due from their customers, also known as accounts receivables. The lender loans the money and calculates interest based on how long the invoices remain unpaid. Once the customers pay their outstanding balances, the lender reviews the invoice payments and takes the interest charged on the loan before the lender returns to the borrower the amount that is due.

What are the advantages of short-term loans?

Short-term loans are probably one of the easiest and most convenient ways to acquire borrowed money in the event of an emergency. Here are the benefits of applying for a short-term loan:

  • You get immediately funded with short-term lending

A shorter maturity date means less risk compared with long-term loans. When repayment is made over a short period of time, the ability to repay the amount of money borrowed is less likely to change significantly. That said, it will only take the lender a short period of time to underwrite the loan process. Thus, the borrower gets the cash faster. 

Short-term loans are also easier to access digitally. Online short-term lenders like 90 Day Loans allows you to file for loan applications wherever you may be. We process applications in real-time and have over 800,000 clients who connected their loan sources through us. 

  • You can get a loan even when you have a bad credit score

If you are an individual or an aspiring entrepreneur who suffers from a less-than-stellar credit score, a short-term loan is going to save you from your financial worries. The lending requirements are more relaxed, and getting approval is often easy to come by. As long as you have a regular source of income, you can get fast cash whenever you need it.

  • You do not need to put up collateral when applying for a short-term loan

Putting up your assets as collaterals—security is pledged in case you were not able to meet the repayment terms—is mostly applicable when you are applying for bigger loans. When you cannot pay back the money you owe on time, you will most likely lose your prized possessions. Since short-term loans are normally unsecured, you do not have to offer up your precious assets as collaterals. Instead, lenders allocate a specific interest or credit limit to you which you can accept or try to renegotiate. However, if you were not able to meet your repayment terms, interest charges will balloon. 

What are the requirements to be eligible for a short-term loan?

Requirements when applying for a short-term loan vary depending on your loan provider. At 90 Day Loans, we make the process easy for you. Our standard requirements and general qualifications are as follows:

  • The borrower must be 18 years old and above.
  • The borrower must have a steady source of income. This means that he/she must be currently employed or self-employed or must be receiving benefits such as retirement benefit or disability benefit.
  • The borrower must have a personal checking or savings account to receive the funds. 
  • Proof of identity is required, such as a driver’s license or state ID number.

What are the fees I need to keep an eye on when getting a short-term loan?

Before committing to any type of loan, you should be knowledgeable of the fees that come along with it. These fees are set in place for a purpose, and most lending partners charge borrowers with interest rates, late charges, or processing fees.

  • Interest Rate

As mentioned above, short-term loans are unsecured loans. This makes their interest rate higher compared with standard interest rates. Your exact rate depends on your present credit rating. Only your lender can assess what interest rate should be allocated to you. The better your credit score is, the lower the interest rate will be.

  • Late Charges

If you were not able to pay your dues on time, your lender might require you to pay late charges on top of your principal outstanding balance. Sometimes, if you keep on not meeting the deadline for the payment, your credit rating may be affected.

  • Processing Fee 

Some lenders charge borrowers with a processing fee, which can be deductible from the loan amount. 

In any case, using our service at 90 Day Loans does not come with a fee, and only a lender can provide you with information on their own rate and terms.

Why should I get a short-term loan online?

Borrowing money does not only apply during emergency situations. You can also wisely use loans to plan out your future by investing the money in putting up a small business. In most cases, you might be needing it for a sudden expense, or your business might need immediate financing to remain operating.

Fortunately, short-term loans online are a fast and easy method to acquire fast cash. However, some individuals have the tendency to borrow money without properly understanding its ins and outs. If you constantly do not pay the amount due on time, it may lead to a big pile of debt and an unwanted credit rating. That said, you must make sure that you only take out loans when necessary.

What are the standard personal loan terms?

While specific terms will vary depending on your state, lender or lending partner, and your circumstances, below is a general range of common terms:

  • Loan amount: $250 – $3,000
  • Lending period: 90 days – 18 months
  • Payment frequency: Once a month or twice a month
  • APR: Will vary based on your credit score, repayment history, and other factors

Is there a prepayment penalty?

According to Fundera, “a prepayment penalty is a fee you’ll have to pay in some cases. In those cases if you pay back your loan ahead of the predetermined schedule you will incur the fee. If your loan includes a prepayment penalty clause, then you’ll be penalized if you pay off your debt early. Typically, a penalty fee is a percentage of your loan’s total remaining balance.”

The prepayment penalty varies by lender. A borrower’s actual rate depends on each lender’s eligibility criteria, which include factors such as credit score, loan amount, loan term, and credit usage and history. All rates are determined by the lender and must be agreed on by the borrower and the borrower’s chosen lender. The origination fee charged by the lenders or loan sources within our connections varies by loan source or lender. Currently, none of the lenders or loan sources within our connections require a down payment.

How do I borrow money through 90 Day Loans?

Congratulations! You have come this far. Now that you are already equipped with the basic information about short-term loans, you might be interested in getting one. 90 Day Loans can connect you to a wide range of reliable personal short-term loan sources to help you with your financing needs. Here is how it works:

  • Fill out our secure form as completely and accurately as possible to maximize your potential connections.
  • We attempt to connect you in real-time using our proprietary online system with more than a hundred loan sources across the United States to fund your loan.
  • Review your loan terms and documents, and if you accept the loan, funds will be deposited into your account.

Why choose 90 Day Loans?

On an occasion where you encounter sudden financial shortfalls, 90 Day Loans can help you get back up. Since 2008, more than 800,000 clients have connected with their loan sources through 90 Day Loans. We pride ourselves on being a pioneer of the real-time online connection process. Because we value your privacy and security greatly. We use 256-bit SSL technology to encrypt your data while on our website.

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