A long term loan is usually preferred when it comes to major investments such as buying a car or a house. However, we are often caught in those situations when we run out of cash towards the end of the month. This is exactly where short term loans could be used. A short term loan can help you survive until the next pay check and it could be used for several other purposes. We have listed down some situations when short term loans would actually make sense.
At the time when the bills are due, the companies expect you to pay them in time. However, in case if you are short once, you may perhaps have sufficient funds to cover up the bills. In such cases, a lot of individuals choose to pay the bills late and hence they bear the late fees. Unfortunately, these late payment fees are pretty high, based on the company that you deal with and the time limit.
In such cases, short term loans would give you enough money to pay the bills in time and the finance charges would be way less than the late fees enforced by the company.
We have all tried to “float” a check, which means that we often write a check with prior knowledge that the funds would be deposited before the check goes for clearing into the account. However, with the process of electronic banking, such a practice has proven to be expensive for a lot of bank consumers.
In case if the check bounces, then you would incur NSF fees by the bank as well as the additional penalties by the third party, to whom you initially wrote the check. If you know that there is no balance in the account, you can consider the short term loans, even for groceries and other expenses before the pay check.
We live in a world of uncertainties and there are chances that we might come across some unexpected expenses. Sometimes these emergencies happen when you least expect them and therefore the short term loans may come in handy in such situations.