Why You Should Consider Taking Out a Short-Term Personal LoanJul 11, 2019
Taking out a loan is a process that requires a lot of thought and understanding to ensure that you don’t get trapped in a severe financial crisis for years to come. When you take out a major loan like this, you will be forced to stick to a particular lifestyle for a long time, as you will always have to set aside part of your monthly income to pay off these debts. This is true with different types of loans, especially long-term ones such as a business loan or a mortgage. For this reason, many tend to shy away from taking out these loans unless they really need to.
For this reason, many people have turned their attention towards short-term loans, as they usually don’t come with so much stress. That said, here are eight reasons why you should consider getting a short-term loan instead of a long-term one:
- Shorter Payback Terms
Short term loans may require that you pay more for each instalment for the same amount of money, but the upside of it is that the debt will be settled sooner. You won’t have to worry about putting yourself under stress for a long period of time, so if you can afford to pay it off ASAP, short-term loans are usually a better option.
- Lower Interest Rates
Short-term loans usually come with a lower interest rate, which can help you save a lot of money in the long run. For a short-term loan, that rate can drop down to only 2% to 3%, which is a significant reduction.
- Lower Long-Term Risk
If you don’t know what your finances will be like in 20 to 30 years, taking out a short-term loan and paying it off within five years can be a much better option. Paying it off it may be hard on you for those years, but at least you won’t have to worry about it when you are 50 or 60 years old.
- Less Mentally Taxing in the Long Run
It’s mentally taxing to have to give a considerable sum of money from your paycheck away every payday, so it’s better that you get it out of the way sooner rather than later.
- Quick Boost for Your Credit Scores
Paying your bills on time will boost your credit scores incredibly quickly. This will put you in a better position to take out a bigger loan with better terms in the future.
- Get More Equity Sooner
Compared to getting one property in 30 years, you can have more homes and other equities sooner with short-term loans.
- No Risk of Collateral Repossession
For some types of short-term loans, you don’t have to use your property or other assets as collateral—just cash. It will put less stress on you in the long run, as you won’t have to worry about having your car, home, or other equity repossessed by the bank.
- Get Cash in Hand Fast!
A short-term loan takes less time to process, as there are usually fewer risk factors that they have to take into account. If you’re looking to take out a personal loan in South Africa, Hoopla Loans is your best option. Get in touch with us today to see how we can help.