A short term loan is a small unsecured loan that is intended to be repaid over a short period of time, usually from your next pay. They usually have higher rates of interest than other types of loans. But, they can be useful if you need money fast with no hassles, and you are confident you can repay it.
Short term or ‘pay day’ loans have had a bit of a bad rep in recent years. And, although they aren’t right for everyone, they do have their place if you need a small short-term loan and you are confident you can repay it.
Top benefits of short-term loans:
- Short term loans can help you if you need to borrow a small amount of money to cover and emergency or something unexpected – like car repairs, medical expenses, unexpected bills or a broken fridge.
- Your request to borrow money is typically reviewed quickly, and if you’re approved you could receive the money within an hour. They are a good option if you need money now with no hassles, and you are sure you can repay it soon.
- They can be much more flexible than other types of lending allowing you to borrow a small amount of money (from around $100) for just a couple of days, a few weeks or a few months.
- A good provider will typically tell you all the costs upfront (interest and fees), so you know exactly how much you will need to repay
Money Compare are pleased to partner with Moola. They specialise in loan from $100 up to $5,000. Make an informed choice about your borrowing and design a loan that suits your situation – choose how much you need to borrow, how long you need it for, and see all the costs and repayments up from.
Here are our tip tips for choosing a short-term loan:
- A personal loan could be for a few hundred dollars or for thousands of dollars. Payday loans are intended to be paid back over a very short period of time, so the interest rates are higher than other types of borrowing (e.g. credit cards).
- Interest rates and fees vary between lenders, so compare all the options before you pick your lender. Money Compare can help you compare New Zealand’s main lenders side-by-side
- Only borrow what you need and be sure you can repay the loan. Typically, if you can’t afford to repay the loan you can’t afford to get one.
- Repay the loan as quickly as possible. Although repayments may be lower if you spread them over a long period of time, it will significantly increase the amount of interest you pay.
- A personal loan can affect your credit rating. If you make your payments on time, then the personal loan can improve your credit rating. However, if you make your repayments late or do not repay the loan it will negatively affect your credit rating. Find out how to check your credit score.