Stay financially responsible with short term loans

A young man working at a laptop.Short term loans have been around since Ancient Rome, but modern short-term lending institutions only started opening their doors a couple of decades ago. Because short term loans in their current form are a relatively new financial product, they can be misunderstood. Big banks purposefully cause this confusion because they don’t like competing with companies that offer short term loans.

Match Financial is not a lender, it is a company that provides information about short term loans and finds a lender for a borrowers situation. Our business depends on helping borrowers make good, well informed financial decisions.

Short term loans on your terms

Getting short term loans means getting money fast and solving an immediate financial problem. Borrowers pay back short term loans within a few weeks, so there’s no long-term debt. Short term borrowers can simply fix the problem and move on. When it comes to keeping up with payments or handling expenses, sometimes timing is the most important factor. Short term loans help borrowers stay financially on schedule because they  arrive in the borrowers bank account via direct deposit.

Types of short term loans

Short term lenders generally offer two types of loans: payday loans and installment loans. Payday loans, also known as cash advances, are repaid when the borrower receives his or her next paycheck. Installment loans allow the borrower to make several payments over a few weeks or months. For both cash advances and installment loans, the lender charges a fee that is paid along with the loan repayment. No cash or collateral is needed up front.

Short term loans made simple

Applying for a short term loan online is similar to applying for a traditional loan in that the borrower provides some basic information and requests a loan amount in writing. Once the lender and borrower agree on the short term loan amount, the fee and the repayment date, the money is directly deposited in the borrowers checking account. Most short term lenders don’t do credit checks; they base the amount they are willing to lend on the borrowers income.

The average short term loan

Short term loans are generally between $100 and $1,000. Borrowers should carefully consider the loan amount and only take what they absolutely need. Some lenders may extend the term of the loan up to four weeks, but many require that the loan be repaid within two weeks, except in the case of installment loans.  can find lenders who can accommodate various borrowers terms, but we recommend that borrowers keep their short term loans as short term as possible. Lenders generally must charge at least 15 percent of the loan amount to stay in business.  A fair price for a short term loan is between $15 and $30 per $100 borrowed.

Short term loan regulation

Modern short term lenders began opening money lending stores in the late 1980s. Since then, the industry has become heavily regulated in regard to the fees lenders can charge, loan terms and collection practices. By the time online lending became available, most of those regulations were already in place. In recent years, though, short term lenders have been run out or outright banned in some states. Certain states have placed interest rate caps that made it impossible for short term lenders to be profitable. However, because making short term loans disappear doesn’t make the need disappear, many residents of states where short term loans are unavailable turn to online lenders to get the cash they need.

Interest rate caps and short term lenders

For years anti-short term loan lobbyists, who generally have a stake in large banks and financial institutions, have tried to get interest rate caps put in place based on an annual percentage rates. However, basing the fee on a two- or four-week loan on an APR doesn’t make sense. Most short term lenders have a pretty small profit margin, the average is about 10 percent. Anti-short term loans groups say that short term lenders charge astronomical APRs, but they’re applying a yearly rate to a loan term thats only a couple of weeks.

Short term loans for lifes necessities

Financially responsible customers know that short term loans should only be used for necessities. In many cases, short term loans can save borrowers money — especially for borrowers who are facing the possibility of overdraft charges. The average overdraft fee is $35 per occurrence, and the amount by which a customers overdraws the account is not a factor. A bank customer could pay $15 for a $100 short term loan and avoid being charged multiple overdraft charges for negligible amounts. Short term loans can also help borrowers avoid late fees and protect their credit ratings.

s research and news

A main component of our operations is researching the short term lending industry. To learn more about the history of short term lending, read responses to the arguments against short-term lending and get current information on legislation and regulations, check out our Payday Lending Statistics Report. To get up-to-the-minute news on the short term lending industry and the overall financial industry, as well as other current events, keep up with our Money Blog.

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We do not loan money. We are an independent institution that researches financial regulations and individual short-term lenders to help borrowers find honest lenders, keep their personal information safe and make sure they get a fair price. Match has nothing to gain from working with lenders who exploit or harass their customers. Our business only survives as long as our customers have a good experience.

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