If you‘re strapped for cash and cannot wait until your next paycheck, there are several ways to borrow money in the event of an emergency. The most readily-available options are short-term loans and payday loans. 

Reasons for Taking Out Short-Term or Payday Loans

Not meant for frivolous spending or vacation money, short-term and payday loans are designed to supply responsible borrowers with quick cash to cover emergencies such as:

· Medical crises

· Funeral expenses

· Home damage

· Household appliance replacement

· Unreliable transportation repairs

· Gaps in employment

While they both offer instant funds, short-term and payday loans differ in the amount of time they give you to pay it back and the number of repayments you can make. Many borrowers, however, prefer the flexibility of short-term loans over payday loans. Here are some reasons why short-term loans are a better alternative to payday loans.

Disadvantages of Payday Loans

Because payday loans are fixed, you only have until the next paycheck to repay the loan in one lump payment. However, payday loans have high interest rates attached. Therefore, with payday loans averaging around $400, a borrower has two to four weeks to come up with nearly $500. If they could reasonably come up with that much money in two weeks, then they wouldn’t have needed a payday loan in the first place. This is an unrealistic lending model that creates an endless cycle of increased debt and interest and rollover fees that can destroy your credit and cripple your financial health.

Benefits of a Short-Term Loan

Unlike payday loans, short-term loans generally offer the borrower a realistic timeline for repayment. With short-term loans, you are given adequate time to pay-off your loan — generally two to 10 months. While not always the case, short-term loans have even been known to grant up to 12 months to pay back a loan. More and more people are turning to short-term loans to get them the cash they needed in a short amount of time. While short-term loans allow you the opportunity to borrow money without becoming a victim of the predatory practices perpetuated by the payday loan industry, they are still high-interest loans that put you in debt.

Loan Debt Consolidation

If you are swimming in debt from short-term or payday loans, rely on the professional credit counseling, financial assistance, and debt consolidation services at Progressive Debt Relief. We can help settle your unsecured debt and put an end to your cycle of borrowing. To schedule your complimentary consultation, contact us today.