Home Best 4 Short Term Loans

Short Term LoanMany Americans turn to short term loans to help solve their unexpected problems. You probably have used one before to clear a bill or to boost your business. The process of borrowing a short term loan is simple, and the money is in your bank account in one business day.

From the name, it is clear that short term loans last a couple of months, at most 48 months. With traditional loans, the loan amounts range between $2,000 and $500,000. The interest rates vary greatly between 6% to 700% depending on the type of short term loan and the lender you are working with. You can choose to use the short term loan to boost your business or for other personal use.

You can consider short term loans were a race; they would be a sprint. On the times that you do not have the strength or perseverance to run a marathon, a short term loan is a great option. However, bear in mind that like a typical sprint race, you’ll need a burst of energy to complete the race.

 Note: Short term loans come in different forms and have high APRs.

Best Short Term Loan Providers in 2021: Summary

Reviewers Choice
Check City Loans
Available Loan Amount
$100 - $2,500
Available Term Length
2 months
Representative APR
214% – 1173.21% APR
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Money mutual – Short term Loan
Available Loan Amount
- $2,500
Available Term Length
2 months
Representative APR
0.8% per day
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CreditBox Loans – short term loans
Available Loan Amount
$100 - $4,000
Available Term Length
90 Days
Representative APR
175% APR
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Cash Factory
Available Loan Amount
$100 - $1000
Available Term Length
6 Months
Representative APR
207.7% - 547.36% APR
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What is a short term loan?

Short Term Loan
Short term loans are small and only last for a few months. Generally, the amounts don’t exceed $500,000, and that’s for businesses. For personal short term loans, the loan amount is even lower. Unlike traditional loans that are serviced for a couple of years, most short term loans are repaid in a year or a few weeks, depending on the lender and the loan amount.

The type of short term loan you will get depends on your credit score and the lender you pick. Below is how the loans work.

  • You apply for a loan online or through a store location in your state
  • The lender performs a soft credit check and considers your current job and income for stability and affordability
  • If the lender gets to approve the loan request, you will receive an offer that will detail the loan term and the interest rate that applies
  • Most short term loan lenders fast forward the review process and give feedback of acceptance or rejection in a matter of minutes, usually no longer than 60 minutes
  • If you agree with the offer and receive the money in your bank account, you will need to start preparing for repayment.

If you have never taken a short term loan before, the process might take a little longer because the lender will need to verify your documentation. However, subsequent short term loans are processed even faster and with reduced stress.

Best Short Term Loan Providers in 2021

1. Check City Loans

In the current world of uncertainty, financial emergencies are one missed paycheck away. It can be anything from urgent household bills, medical emergencies or an urgent car repair. While it’s almost impossible to avoid these costs, an emergency short term could be a life saver in such cases. Thankfully, Check city loan providers are ready to help in the event that you need a short term loan to sort your financial emergencies.

In fact, their loan application process is streamlined to make it easy for you to access funds within the shortest time possible. You can apply for a loan from any of their physical locations spread across 16 different states, or use apply through their website conveniently from your phone or laptop. They offer a generous loan limit of between $100 and 2500, which is to be paid within an extended period of up to 2 months. Their low interest rates are set at 214% – 1173.21%, so you can pay back your loan faster and bounce back to financial stability.

Our Rating

  • Fast loan approval process
  • Offers unsecured loans even with a bad credit rating
  • Extended payback period of up to 2 months
  • Accredited by Better Business Bureau
  • Late payments attract penalties
  • Charges extra fees for processing a loan in certain states

2. Money-Mutual

In its most basic form, Money Mutual is an online lending marketplace that seeks to connect you to an ideal lender, at the comfort of your home. The platform gives you access to a long list of lenders ready to offer you a short term loan of up to $2,500, which is deposited in your account in less than 24 hours. Usually, the lenders expect you to pay back the loan within 2 weeks to 2 months, at an average daily interest rate of $0.80 on a $100 loan. Though, there are lenders who add costs processing and lateness fees; you can easily choose one with more lenient lending terms.

Our Rating

  • Large borrowing limit of up to $2,500
  • Straightforward loan application process that often take less than 5 minutes
  • Accepts all credit ratings
  • Trusted by more than 2,000,000 customers
  • Has varying interest rates
  • Not a direct lender

3. CreditBox Loans

Sometimes when faced by a financial emergency, it’s really hard to estimate the exact amount of cash you need to sort out the problem. Often, the fear is that you don’t want to borrow too little and end up having not sorted out the emergency completely. As such, you need a loan provider with a large borrowing limit to ensure that you get enough money to completely cover your emergency. CreditBox is an ideal example of such a loan provider.

You are allowed to borrow short term loans from as little as $100 to as much as $4,000 ensuring that you get just the right amount to sort your urgent bills and expenses. The loan is to be repaid within 90 days as the maximum payback period, but you can also pay off your loan early at no extra charge.

Our Rating

  • Above-market Loan limit of between $100 and 4,000
  • Extended payback period of up to 90 days(3 months)
  • No credit score requirement
  • Referral programs where you can earn as much as $100 on your initial borrowing limit
  • Interest rates can go as high as 175% APR depending on the state you are applying from.
  • Available only selected states

4. Cash Factory

Cash Factory understands that unexpected costs may arise weeks or days away from your next paycheck. That is why they have positioned themselves as the go-to lender in 9 states, offering short-term financing options to those in urgent need of money. The lender offers a borrowing limit of between $100 to $1,000 ,depending on your state of residence, with a payback period starting from 2 weeks to 6 months.

Regardless of the amount you borrow, the interest rates stay within the range of 207.7% and 547.36% which is fairly affordable compared to the other competitors. The best thing is that there isn’t a minimum credit score requirement; as such, the loans are available to even those with low credit ratings.

What sets Cash Factory apart from other lenders is its transparent fee framework. This ensures that you know the exact amount of money to pay back without any hidden charges.

Our Rating

  • No minimum credit score required
  • Lenient borrowing terms and payback period
  • Relatively lower interests rates
  • Offers a transparent repayment plan
  • Low loan limit
  • Services are only available in 9 states

Pros and cons of short term loans

Below are the ups and downs of short term loans.


  • Fast funding
  • The loans are usually unsecured
  • The money is available for emergencies


  • The interest rates are high
  • The loans are costlier than credit cards
  • They have hefty penalties

Types of short term personal loans

‘Short term loan’ is a term used to refer to different types of loans, but what they all have in common is high APR.

i) Emergency Loan

An emergency cash loan comes in handy during emergencies. It is perfect for borrowers who need instant cash. You can use emergency cash to cover immediate expenses like car and home repairs, medical bills, and other unexpected costs in your life. If you have a low credit score, you’ve been turned down by many banks and mainstream financial institutions; it’s because you’re deemed as high risk.

But what banks will not offer, emergency loan lenders will offer you in an eighth of the time. The only catch is that you will need to repay the loan in a shorter time.

ii) Payday Loan

Another type of short term loan is a payday loan. These are great for borrowers with bad credit scores. These loans have high APRs and fees. Because of this, we advise our readers to be wary of these loans. Sure they are handy, but they need good planning lest you find yourself trapped in a debt cycle. No credit check payday loans are payable within two weeks or a month, depending on the lender, and the interest rate is capped at 0.8% per day.

iii) Line of Credit

A line of credit is another good option. If you run a business and you ever need some cash to keep products flowing, it will come in handy. The number one benefit of using a line of credit loan is that many banks do not charge interest for the money you end up not using.

For instance, if you have a $60,000 line of credit and you only use $30,000, you will only be required to pay interest for the $30,000. You can continue to withdraw as much as you please provided you do not exceed the set amount.

Note: The line of credit is also known as an overdraft.

iv) Bridge Loan

Have you ever heard of this type of loan? Probably not. A bridge loan can help you when you are short in cash. A perfect situation is when you are in the process of buying a new home, but the old one is still on the market. The bridge loan can help you cover the mortgage costs.

For this type of loan, borrowers usually give up collateral. So essentially, it is a secured loan. Though they have high-interest rates, they are great options for homeowners who cannot put the purchase of a new home on hold before they finalize the sale of the old one.

v) Invoice Financing

This is a type of loan that you get through business receivables. They are invoices that are yet to be paid by the customer. The lender loans the money and then charges interest based on the weeks that the invoice is outstanding. When the customer finally pays the invoice, the lender interrupts the payment of the invoice, takes the interest charged on loan, and then returns the rest to the business.

How much does a personal short term loan cost?

According to federal and state regulations, the maximum interest short term lenders are allowed to charge for their loans is 0.8% every day. This is about $0.80 daily interest on a loan of $100. Because of this cap on the interest rate, the amount you repay will never exceed the loan amount. With this logic, it means that you will never come across a lender charging more than $100 for a $100 loan. Though some lenders charge lateness fees, federal and state governments have caps imposed on these as well. These limits are considered when calculating the cost of a loan. Even if you fall behind on your repayment, it still will never exceed your loan amount.

With that said, we should stress that the interest lenders charge is more of a percentage instead of a flat rate. The more you borrow, the more you will spend in interest as well.

Note: You should only apply for a short term loan in cases of emergencies. If you apply for a short term loan to cover an expense you could forgo or for going on the likes of a shopping spree, you will repay, and in the end, the purchase you make be more expensive than if you had waited to have cash in hand.

So what is the APR on the short term loans? APR, annual percentage rate, is the percentage you repay a lender in the form of interest. APR is different from the interest rate since it provides a full picture of how much the loan will cost you.

The calculation of finding the APR is somewhat complicated because it takes into account several factors. However, it can be simplified to consider a few basic factors and have others as assumptions. For instance, APR calculations always assume that the lender will compound the interest rate. With the compound interest, you only pay interest on the outstanding loan, which includes the interest added to the previous balance.

Some lenders decide to charge the interest as simple interest. Here, you only pay interest on the loan amount and the month to month interest isn’t added to the balance.

APR calculations are calculated for a year because lenders assume you’ll borrow the amount for a year or even longer, but since short term loans don’t last a year-long, some experts advise against using APR to determine how much interest you’ll pay, unless, of course, you’ll make adjustments to reflect the exact loan term.

Given the risks short term loan lenders take on, including giving bad credit loans and unsecured loans, the APR is usually through the roof. Because of this, you cannot borrow a short term loan to pay it off for a longer period.

Before you apply for a short term loan, you should consider the affordability of the loan. Other charges on short term loans include;

  • Processing fee – the lender charges you for processing the application fast to cater to your emergency
  • Extension fee – if you know you will miss your payments, you should talk to the lender to reschedule your repayments. Some lenders do without a problem, while some will include an extension fee.
  • Broker fee – you will incur this cost if you apply for a short term loan with a broker instead of a direct lender. Brokers charge a commission as well as a brokerage fee.
 Note: broker lenders have the advantage of sending out your loan application to multiple direct lenders to get you the best for your loan needs.

Where can you get short term personal loans?

Payday lenders are the most common lenders of short term loans. Their short term loans often last less than a year, with some lasting for two weeks. Though they can always extend the loan term if you are having problems paying, most borrowers prefer not to because of the costs that follow.

Aside from payday lenders, there are other places you can get short term loans. These include;

A bank or a local credit union – you can always visit a traditional financial company to see if they have short term personal loan programs you can take advantage of. And while you are at it, you should also enquire about the terms as well. Bear in mind that with mainstream lending institutions like banks, you’ll need to have a good credit score.

Online personal lenders – the internet is flooded with lenders offering short term loans. You can always find one that fits the bill for you in terms of loan cost and loan term.

Who you go to for the loan matters a lot because it will determine if your credit score can grow if you repay faithfully, how much the loan costs you, and the general experience you get.

How do lenders decide if you are good for the short term loan?

Short term loan lenders are required to be responsible lenders. This means that in as much as they are lenient, they should at least ensure the borrower, either an individual or a business, can afford the loan. Below are some ways lenders determine if they should accept or reject a loan application:

  • Personal debt ratio

Many Americans have a lot of debt, so you shouldn’t feel bad about having debt. However, it matters how much debt you have and how much credit you have. Lenders will divide the debt by the credit you have available to determine your creditworthiness.

  • Business debt

If you want to take debt for a business, the lender will look into how much debt the business currently has. If your debt is similar to what other businesses in the industry have, you are in the clear. But if it’s heavy, in comparison to the size of the business, then lenders may start to second guess your application.

  • Business revenue trends

Where the business is going is important. While one cannot predict the future, lenders will evaluate your revenue growth and see how it compares to the industry average. If it’s at the center or upper-tier, your business qualifies for a short term loan. A lender will feel confident you will repay.

  • Personal debt coverage

It’s only right that a lender will want to know how you spend your money. Some lenders will request for your debt coverage to determine if you will manage to make repayments even if your business started struggling.

  • Business debt coverage

There is no problem if the business has some debt; it’s normal. However, a lender will want to know if you can handle the outstanding debt plus the new one. They will evaluate the business’ cash flow as well as the debt repayments while considering affordability.

What documents do I need to apply for a short term loan?

The documents are all needed to ensure you are a US citizen and that your income is what you say it is. In this light, if you are applying for a personal short term loan, you should provide;

  • An identity card
  • A payment stub or details of your employer
  • Your social security number
  • Bank account details

What is the minimum eligibility criteria?

A short term loan is accessible by many people, but even it has some restrictions. Some of these include;

  • You need to be over 18 years or 19 years depending on the state you are in
  • You should have regular income; usually not less than $800 because lenders aren’t allowed to make you repay more than 25% of your income every month
  • You should be a US citizen
  • You should live in a state that the lender offers its services to
  • You shouldn’t have an outstanding loan


Short term loans are great, but before you get one, you should always do your due diligence. You should never settle for a lender that is not licensed by relevant authorities in the US. You should always shop for an APR you can afford. Though short term loan costs are high, you can always find one that is low enough for your needs.

You should also choose a company that has good customer support. This way, even if you run into repayment trouble, you can call and have the issue sorted out before the deadline passes.

Glossary of Loans Terms


Can I use a short term loan for debt consolidation?

Can a short term personal loan affect your credit score?

Can I negotiate the terms of the loan?

Can I take multiple short term loans?

Is there a fixed APR?

How long will it take before I have the money in my account?



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.