December 4, 2018
Student loan statistics don’t look promising for most borrowers, and that is showing in the prevalence of Gen Z-era high school graduates opting for non-college career routes. The average person with university-based student loans takes ten years or more to pay off all their loans fully, and that often delays them from starting families, seeking health and life insurance, and paying into a retirement fund. Long-term loans might seem like the best option at first, but between interest and the amount of time it takes to pay them off, long-term loans often have severe consequences for those who take them out.
Despite these consequences, the simple but effective short-term loan is villainized over traditional loans. Pervading ideas exist that the short-term loan is ultimately more expensive and has fewer benefits than conventional lending. We don’t want to start any conspiracy theories, but our competitors in the loan business might have their reasons for saying this, which is why those who can take out longer-term loans from financial companies do.
Unfortunately for many, loans with larger financial institutions are not always preferable or possible. Short time frames, poor credit, and the need to pay off a loan sooner puts traditional loans out of the picture. That’s where short-term loans — like payday loans or title loans– come into the view. Using physical collateral rather than credit history, it is possible for those with poor credit to take out loans quickly and with a shorter repayment period. And despite popular myth — this can save you money and time.
Here are the top five benefits you can receive from a short-term loan financed through Midwest Title Loans.
1. Taking out a short-term loan can actually improve your credit rating.
For many loan seekers, getting a loan in the first place is often hard to do because of credit history. Getting denied funds from a major financial institution can feel like a hard blow, especially if you have a history of paying your bills on time. In reality, most Americans have less than great credit scores and shouldn’t let situations like fair or poor credit scores ruin their lives. Taking out a short-term loan for small needs, like car repairs or house fixes, allows you to make fast payments on a small sum. Pay all these on time and within the allotted period, and you might see your credit score drastically improve in a manner of months!
2. Emergency funding can be obtained on the same day
Emergencies happen, and when they do many of us do not have the funds to pay for them. As many as 40% of people living in the United States do not have enough money in the bank account to pay for a $400 emergency. For perspective, it costs an average of $2500 for the most basic broken arm services. In the event an emergency does arise, and you need the funds to pay for it quickly, a short-term loan might be your best option regardless of your credit score. With a very short application process, and funds available almost immediately, short-term loans are perfect for the unexpected.
3. You can plan your payments better when you can see an end date.
Where many loan customers go wrong is in taking out more than they know they will be able to handle down the line. College students, for instance, often take out loans and forego payments during college with the idea that they will pay for their loans as soon as they get a good job with their college degree. While this does happen in some instances, a recent study shows that only 27% of college graduates end up working within their intended career. An even smaller number of those get jobs that pay them well enough to pay their hefty loans off quickly. With a smaller loan, it is easier to budget for payments and make a sound judgment about the life of your loan.
4. You ultimately pay less interest, which can equate to less money paid total.
Short-term loans get a bad rap for having high interest rates, but even if their rates are higher they (which they often are not) the very nature of the loan means that customers pay less interest than with a traditional loan. The typical short-term repayment period is between a few months to one year. Over the course of 20 years, college loans can obtain thousands in interest, which is substantially more than with short-term loans. In short, although sometimes loan customers feel the sting of short-term loans a little harder, they ultimately end up paying much less.
5. You can take out a short-term loan with Midwest Title Loans without having a great credit score.
Short-term loans are designed for those with low credit scores. They often use collateral to back up repayment, but even when they don’t they depend upon collateral they make money by working with as many customers as they can. Midwest Title Loans helps customers understand exactly how much they can afford to take out and what their repayment will be like. For many, this is one of the only ways they will be able to take out loans, and repayment of that loan will help boost their credit score so more financial opportunities are eventually available.
While short-term loans are portrayed as the boogeymen of the lending industry, with the right knowledge and a good lender, the benefits of these loan types are multifaceted.
Get started with a title loan from Midwest Title Loans today. One of our knowledgeable agents will be able to assist you with the application and help you take the next step toward getting the money you need. We have three locations in Missouri, at Kansas City, Gladstone, and St. Joseph. We also have two locations in Kansas, at Kansas City and Overland Park. Our hours of operation vary based on our location, so be sure to call in or contact us before stopping by.
We look forward to working with you on your next financial investment.