Once in a while, you might find yourself in need of financial assistance to take care of some bills or needs. During these times, the best action to take is to get a loan to help you facilitate the payment of those bills and needs. Normally, there are several loan options you can consider including short-term guarantor loans, payday loans, and an overdraft. With all these, you will be required to pay back the loan amount, the interest charged, and any other charges involved. However, out of the three loan options, short-term loans happen to be a better alternative to the other two. Read on to learn the benefits of short-term loans as an alternative to overdrafts and payday loans.

Understanding the Three Loan Options

Short-term loans are given out over a prearranged period of time. The time-frame for this period is usually a few months to one year. The borrower pays the loan amount plus the interest and any other charges applicable, in instalments.

Overdrafts, on the other hand, allow you to have access to extra money when your account runs out of funds. It is your financial institution that sets up the limit of your overdraft. This means that you must have a transaction account in that particular financial institution.

Payday loans offer borrowers the opportunity to borrow money over a short period of time. A payday loan is repaid after a predetermined date. The loan amount and interest are paid in one go. There are no monthly instalments in this loan option.

Short-Term Loans as an Alternative to Overdrafts

Short-term loans are better than overdrafts in a number of ways. To begin with, with short-term loans, you can have as much money as you need to settle your financial needs. This is not the same for overdrafts because your financial institution sets up a limit for you. This makes a short-term loan a better option for borrowers. Additionally, with an overdraft, you can only access funds if you have a transaction account with a financial institution. On the contrary, you can have a short-term loan from different lenders, which makes it a better alternative to overdrafts.

Short-Term Loans as an Alternative to Payday Loans

A short-term loan is better than a payday loan in several aspects. To begin with, you have the advantage of repaying the loan in instalments compared to paying in one lump sum for a payday loan. Short-term loans give borrowers time to settle the loan amounts plus interest without much pressure. Again, short-term loans usually have a lower interest rate compared to a payday loan. It is these aspects that make short-term loans better alternatives to payday loans.

Having learned the difference between these loan options and the aspects that make short-term loans better alternatives to overdrafts and payday loans, it is satisfying to know that NowLoan is a reliable financial partner when in financial need. You can apply for a short-term guarantor loan at NowLoan and get connected to a possible lender within minutes. The application process is easy, safe, and secure. If you are in need of financial assistance, you don't need to be overly stressed because NowLoan will be the link you need to get a short-term loan to take care of your financial needs. Apply now, through their website, and get connected to a possible lender in a safe and secure way.