Short term loans to help pay bills.
Short term loans, which are generally defined as needing to be quickly repaid within weeks or a few months (or even days), are offered by a variety of lenders, including those approved by Community Financial Services Association of America (CFSAA) as well as Consumer Financial Protection Bureau (CFPB). The loans, which are often unsecured, can be used by borrowers to help pay bills in an emergency or cover an unexpected personal expense. Find details on loans for the short term, whether the repayment is within days or months.
The short term personal loans can be issued in small dollar amounts, they can assist borrowers with poor credit scores, and there are even online lenders as well that focus on certain situations. While the funds can be an option for some people, the fact is anyone who is looking to temporarily borrow money, no matter the reason, the cash needs to be sure they can (1) afford the monthly payments and (2) have the ability to pay it off on time.
Government and industry approved short term credit-loan programs
As listed below, there are many private (as well as charitable) places that a person can get a temporary loan from, including those that need to be repaid over a shorter time frame. In addition to many of those lender, the federal government CFPB as well as some national non-profits also screen these lender to help people find legit, non-scammy sources of short term loans. They include the following.
Consumer Financial Protection Bureau (CFPB) has many resources listed for people that need money now. They include the Payday Loan resource page as well as details on other short term lending options from the Consumer Lending page. CFPB has information on local state-by-state regulated lenders for a temporary loan and more as listed here, and the goal is to help verify if a lender is legit and licensed in a state.
Another source of a loan is the CFSAA (Community Financial Services Association of America) directory. This is an approved mostly regulated industry group of licensed short-term lenders. But it is not government regulated, but it still a approved source for people that needs temporary funds. It will help borrowers find legal lenders in their area that follow best practice. Find details on the regulated lenders here. https://www.cfsaa.com/.
Short term loans can help pay bills (but may not be the best option)
One of the risks of using a short-term loan, especially to pay bills or expenses such as rent, is starting a cycle of borrowing more and more money. This is always a danger, especially for low income families or those with poor budgeting skills. Therefore, anytime anyone is applying for any sort of loan (whether it is short or even long term) they need to be mindful of entering into a cycle of debt.
Loans that are considered to be shorter term in nature can also be issued by a number of places, including payday lenders, advances from services such as Daily Pay, fintech companies including BNPL lenders, online banks and other sources. These lenders and loan programs for short tern needs tend to be focused on the working poor, immigrants, individuals with no or bad credit, and others that are not in the mainstream banking system.
Note that any loan, whether it needs to be repaid in a shorter period or longer, tends to be very risky for a struggling borrower. The interest rates can be extremely high as well as any associated fees. In general, borrowers should stay away from any payday type short term loans, however they can be an option in certain circumstances.
Apply to loans that need to quickly be repaid
Note that many of these short term loans are targeted at borrowers with poor credit scores. Or maybe they lack a credit history. These loans are often much more costly (higher interest rates, fees, etc.). Therefore shop around. Or look for other options, such as pre-paid credit cards or even financial aid from the government.
Consider all alternatives before borrowing money. Non-profit credit counselors can be a good resource to try to improve credit before borrowing money. Or some credit unions as well as local, community banks combine small dollar, short term loans with free budgeting services. This will help any borrower with poor credit address the underlying causes of their hardship.
There are a number of places that can issue these loans that need to be repair within days, weeks or months. The application process is normally streamlined, so the borrow can often get the money in a matter of hours if not days. This is one reason why the funds can be effective for paying some type of bill in a crisis. Some of the possible places to apply at for a installment type loan that needs to be repair over the short term include:
- Credit Unions – Borrowers need to be members, and most of these lenders operate as non-profits however they will issue loans as needed.
- Buy Now Pay Later loans - There are lenders, such as Klarna, Paypal/Venmo, and others that allow people to temporarily borrower money as a loan that needs to be quickly repaid. The money is often interest free and even more people with limited credit and more details on BNPL loans with a minimal credit check.
- Aggregators for a temporary loan - There are several sources of temporary loan and comparison sites that can help people get information on borrowing money for the short term, including installment loans, non-profits and personal loans. Learn about short term loans from sources including LendEDU, Fiona, Bankrate loans and others.
- National and community, local banks – Many local (and some national lenders) provide short term, unsecured personal type installment loans to the general public. Also, community banks offer funds, and they offer personal loans are often available from these locations, and they provide short term funds to residents of the immediate community.
- Online peer to peer and alternative lenders – There are many companies, including Lendup, Solo as well as Prosper among others, provide funds using an automated, online process.
- Payday loan companies with short term funds – As noted above, while they issue very short-term loans, the interest rates, fees, and other costs tend to be very high.
- Non-profits or charities – Some organizations will offer emergency short to medium term installment loans at zero interest rates, but they will come with conditions including borrowers need to enroll into case management.
- Government - Some state or local human service offices issue funds to pay emergency bills, and they may provide the money in the form of a short term installment loans rather than say grant from welfare.
There are many other types of emergency, shorter term loan programs as well. While all of them have pros and cons, they can be an option but (as noted) come with risks. Examples may be a pawn shop, title loan company, or even a loan shark or similar type service - but be mindful of them. Here is a list of emergency loans including by state and county that can give out money to lower income families for a short period of time.
When applying, any legitimate lender for short term funds should request some basic financial information from the applicant. This should include things such as total household income, monthly expenses, number of family members, total debt levels, the use of the funds and more. As all of that data is critical to ensuring the borrower can repay the short to medium term loan in reasonable time. If the lender does not ask for this information then it should be a red flag as they more than likely are not looking out for the best interests of the borrower.
Be sure to shop around as well. Review the lender’s origination fees for any personal short-term loan. Compare interest rates, any fees around repaying the money early, rollover types costs, and more. Take a close look at the terms and conditions before borrowing money.
Also, anyone applying for a short-term loan to pay for their monthly bills should explore all other options before going down that path. As borrowing money to pay for expenses such as a car repair, medical or utility bill, or rent comes with risks. As it can lead to taking on extra debt, which is never a good idea.
Applications can be accepted by any number of lenders. For short term installment loans, that are competitively priced, apply at a credit union or community bank first. If those are not options, or decline the application, try a national lender such as Bank of America. If still no success in getting a loan temporary funds, then try an online lender as noted above, and (as a last resort) a payday company. That is the list or lenders to apply at for small amounts of money in the form of a shorter-term loan.
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