Best 3 Month Payday Loan Options

Published date: February 4, 2020 | 4:14 PM

What do you do when you are stuck with a financial problem in your hands? Instead of rolling over and giving yourself up to die to the prevailing situation, you have the option of seeking out a three-month short term loan. Unlike other loans, such short term loans are unsecured and are processed fast. Because of these qualities, they are ideal for saving the day.

In addition to their fast processing, the short term loans are more manageable in comparison to the traditional payday loans which you need to pay on your next payday. But what is the problem with that? Well, most times, you will need more than a month to recover from the financial dilemma you were in. The condition of having to repay the loan on your next paycheck only postpones the problem and doesn’t much to solve it.

Unfortunately, finding a three-month short term loan is not a walk in the park. There are many companies but a lot to consider before signing a contract. You need to ensure you are not signing your soul to the devil when taking the loan. To help you understand what three-month loans are all about, below is a quick guide.

In This Guide

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Note: Though three-month loans give you more time to repay the loan, unlike traditional emergency loans, bear in mind that they are more expensive. Some lenders offer three-digit interest rates. As such, you should only take out the loan after careful consideration and determining you can repay the loan in full plus its accrued interest.

How do 3 month loans work?

Three-month loans are like any other installment loan in the industry. The idea is to borrow either a secured or an unsecured loan and then pay it back in installments for a maximum of 90 days. By the end of the 90 days, you’ll have paid back the principal amount plus the interest and any fees that may accrue in the process. Many lenders offer three-month emergency loans ranging between $500 and $5000. However, some lenders extend up to $10000.

Note: $10,000 is a lot of money to get as a short term loan. So, before any lender can offer such an amount, they need to ascertain you are good for the loan and second, they need some form of security. Most loans with such large amounts require that you provide your car as collateral for the loan. This way the company runs a lower risk for the same.

Now, we are in the 21^st century. The world has changed a lot courtesy of the internet. Today, we can do virtually anything online. From running a business to ordering a cab, food, a doctor and marketing businesses. Companies in the US lending industry have with time, turned to the internet for solutions. More and more companies are online and have applications that make it easier for users to apply for loans.

However, some lenders still see the benefits of running brick and mortar stores for their lending business. You can make your application through any platform the lender makes available and still get the money within a day.

The speed with which the loan is disbursed depends on a couple of factors including;

How fast you provide relevant documentation
What time you complete the application. If you complete the application some minutes to close of business that day, your loan application will have to wait for the next day.
The payment method you choose.

How do lenders determine if you are good for the three-month short term loan?

There are indeed secured and unsecured loans in the US. If you have a car, the process of securing a huge amount is easier especially if the car is in good condition. But what if you do not have a car or an asset that the lender can hold on to? And even worse, what if you have a poor credit score?

Well, though lenders take pride in offering unsecured short term loans, they cannot dismiss the fact that they are a business and need to make profits to stay in business. Therefore, once you complete an application, the lender will review the application based on the information you offer ad perform a credit history check with the top credit bureaus in the US. This check shows them if you are good for the loan and how much.

So if you apply for a $1000 loan, for instance, and have a poor credit score, the lender will do its due diligence and consider giving you a smaller loan say $700 depending on their determination of your ability to repay.

Note: Not all companies run credit checks on their customers. Some depend solely on the personal information you provide, because of this, lenders and experts encourage you to be honest with the information you provide.

How do you repay?

Once the loan amount has been deposited into your account, the clock starts ticking. Unfortunately, very few companies, if any, offer a grace period for loan repayment. Though you will not have to repay the entire loan on your next payday, you still have to make a payment.

The company determines the amount you repay from the amount you borrow.

You grant the lender access to your bank account to deduct the loan repayment installment on the due date, or you can pay the loan manually into their account. The former is convenient and reduces the risk of forgetting and having to pay a lateness fee. Moreover, you can also make in-person repayments for the lenders that have physical locations or even wire transfers.

If you do not have a savings or checking account, it may be difficult to get a loan in the first place.

How much three-month payday loans cost?

We cannot make this clear enough – same day loans are expensive. The three-month payday loan you are considering is not an exception. Why are these loans expensive? Easy because the lenders need to reward themselves for the risk they are taking on you. There is a reason traditional lenders don’t touch individuals with bad credit or offer large loans for short periods.

So how much does the loan cost? Being an installment loan, the APR can go as high a 400% depending on the lending company and the state. With the freedom to have such high rates, some lenders can exploit borrowers. Because of this, some states have taken the initiative of regulating how much these lenders can charge for loans under $5000. Because honestly, most people aren’t taking the loans because they can afford them but because they have no choice.

Moreover, some states have banned installment loans altogether for three-month loans. Therefore, three-month loans aren’t available in all states.

But this doesn’t mean that it is impossible to get a three-month loan with reasonable rates. It is possible. For example, CashUSA has a database of lenders who provide loans repayable in between 90 days and 72 months – this is insane. What’s even better, the rates are between 5.99% and 35.99%.

Do I qualify for a three-month loan?

Before a lender gives you a loan, they need to conduct some form of screening; otherwise, they would be bombarded with lots of loan applications of individuals that do not even qualify. Some of the prerequisites for the loans include;

You have to be at least 18 years
You need to be a US citizen
You should have an active saving account
You should have a stable income (and for some, a minimum income is required)
You should live in a state which permits the loans

How can you find the right three-month short term loan?

Many lenders offer this type of loan. But not all are the perfect fit. Depending on your prevailing situation, you need to look for a lender that will offer a loan devoid of undue pressure. Below are some tips for finding a perfect three-month loan lender.

Is the lender available in your state? All states have different regulations on short and long term loans. Because of this, not all lenders service every state. An even if the lender services your state, they may not offer the three-month loan to borrowers in your state – again because of the rules and regulations.

How much does the loan cost? Short term loans are expensive. But the costs vary. You don’t want to be stuck with a loan that will do you more harm than good. And in addition to these, beware of additional fees, including processing fees, lateness and early repayment. Lenders will always provide a summary of the loan and its cost. Use this summary to compare the loan cost and make a choice off of it.

Does the lender accept applications from borrowers with bad credit? Generally, lenders who offer three-month payday loans are less strict on their requirements than those who offer even shorter loans. Because of the more time, lenders are willing to extend a ‘helping hand’ even to individuals who have a bad credit history. This is important because very few traditional lenders will touch such borrowers.

Is repayment flexible? Some lenders allow you to repay the loan before the due date without charging you extra. This is a good thing because it saves you money. Remember, the loan interests are charged per day.

How long do they take to process the loan? By the time you are thinking of applying for a three-month loan, you need the money fast. Luckily, most lenders have a simple application process. It takes less than 10 minutes (if you have all the documentation ready). The evaluation process is also fast and you have the loan on the same day. If you apply in-store, you could have the loan amount immediately. Anything that takes longer than a day may not be worth your time.

How do I apply for a three-month same-day loan?

You can apply for the loan online, through the phone or at a store – it all depends on the avenues the lender has. If you choose to complete the application online, ensure the lender is licensed to offer the financing in your state. Many lenders display the licenses on the rates and terms page or the different states.

Filling out the application only takes several minutes, as will the approval. Many lenders request for the following information and documentation to complete the process;

Bank account and routing number
State issued ID
Proof of income

Benefits and drawbacks of three-month short term loans

Pros:

Quick approval – if you apply for a three-month loan in-tore, you will receive the loan amount almost immediately after signing the contract.
Bad credit is okay – you can get approved for a three-month loan because most short term lenders have no credit loans.
Online and in-store options – you can apply for a three-month installment loan from the comfort of your bedroom or do it at a store if you need the money immediately.

Cons:

High APR – payday loans are famous for their high APRs. This means you will pay a lot in interest than you would with a traditional loan.
Automatic payments – lenders like to list debiting directly from your bank account as a plus. However, if you don’t have the cash to make the repayment, you will end up with an overdraft, which translates to more fees.
Disreputable lenders – most lenders are good. But not all follow the law. Be on the lookout for such rogue lenders looking to take advantage of your situation.

Conclusion

Getting a three-month short term loan is great as it will provide you with enough time to streamline your finances. However, taking a high rate loan with a long repayment time might end up being more expensive than a traditional loan. Always weigh your options before committing.

Apply for a Payday Loan Now! | Best Payday Lender 2020

Our Rating

Loans From $100 to $15,000
Instant Application & Approval
Bad Credit Considered
Lenders From All 50 US States Onboard

Apply Now

FAQ

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Thadues

Thadeus Geodfrey has been a contract writer for Lernbonds since 2019. As a fulltime investment writer, Thadeus oversees much of the personal-finance and investment-planning content published daily on this site. With a background as an iGaming expert and independent financial consultant, Thadeus’s articles are based on years of experience from all angles of the financial world.

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