The variety of loan options can confuse borrowers, and many people worry about the details of the loans. There are predatory lenders in the banking industry, but most companies back up their loans with detailed contracts, set rates, and established payment amounts. Short-term loans are different from payday loans and have a lot more in common with the types of personal loans offered through banks. Here is what all borrowers need to know.
Scheduled Payment Date
All payments occur at a pre-established date. Companies that offer short-term installment loans prefer their clients have the payments removed from their accounts on their payday because of the convenience. The companies offer automatic withdrawal to help prevent late fees. The borrower can contact the lender in advance if they will not have the full payment amount available on that day to make alternate arrangements.
Short Repayment Schedule
Most short-term loans have repayment terms of six months or less because they are only meant to be small loans. The largest amount customers can borrow is $2,000, and not all applicants qualify for this amount. The short loan makes easier to pay the loan off quickly so the debt does not drag out for years. The loan terms are convenient options for someone with unexpected expenses like home or auto repairs or a minor medical bill.
Potential Interest Reduction
Customers that pay off their installment loans early can often reduce the amount of interest they pay for the loan. The effort also improves their standing with the loan company that can result in better loan terms and a higher loan approval amount. The company applies to the principal of the loan any money the borrower pays that exceeds the amount due.
It is usually easier for borrowers to qualify for a loan through companies like Maxlend Loans than other lenders. The process is fast, and some applicants receive their money on the day they apply. To qualify, the borrower must have a source of income that is verifiable and deposited into an open checking account. Only those 18 and older qualify, and borrowers must be residents of the U.S. and not in the process of filing bankruptcy.