search facebook-square linkedin-square twitter envelope

For many American families living from paycheck to paycheck, short term loans can be useful tool for managing the unexpected. But how do you find the best short term loans out there?

Although nearly half of Americans have a decent salary, most do not have enough savings to cover unexpected medical expenses, a car accident, broken refrigerator, or sudden unemployment.

Sudden expenses can pile up fast, and even bankrupt a middle class family with less than $1,000 in savings. Short-term loans are designed to help you get the money you need to take care of the unexpected.

Typically, a short-term loan is defined as less than 30 days, and there are several options available. The options outlined below are the most popular types of short-term loans available when you need fast cash.

Unsecured or personal loans

A personal loan often takes nothing but your signature, they offer a fixed interest rate, and you pay a set amount each month for the life of the loan. They require no collateral and can vary from $3,000 up to $100,000. These can be obtained from your personal bank or credit union. However, in order to qualify for a short-term loan, you will likely need good credit. If your credit score is weak, you’ll probably pay a higher interest rate or be turned down outright.

Personal lines of credit

A personal line of credit gives you a set amount of money you have access to borrow from whenever you need it. This gives you the freedom to borrow only what you need at the moment and, if something else comes up, take a little more out without having to apply for a new loan. This is similar to having a credit card with a set loan limit. But a personal line of credit is issued through your bank, carries a high interest rate, and is only approved for those with very good credit.

Payday loans

A payday loan is also known as a cash advance loan, or a check loan. These are typically best for smaller loans less than $1,000 because they carry higher interest rates. Borrowers typically repay the loan with their next paycheck, but a payday loan can be structured with several payments over a longer period of time.

Auto title or collateral loans

If you own your vehicle outright, you can use your car title to obtain a collateral loan by offering up your vehicle title as collateral. Once you repay the loan, you receive the car title back.

College loans for students

For students, many universities will offer an interest-free short-term loan to cover unexpected expenses specifically for students. Often, these loans are used to cover expenses in the interim before financial aid kicks in and are less than $1,000. These loans, if available, are offered through the financial aid department at the university and are only available to currently enrolled students who are in good standing with the university.

How do I get started?

The best option is to start with your personal banker and see what options they may have available. If you are already a customer, your bank or credit union may be able to get you a better interest rate or lower your monthly fees. They may also have options to consolidate your debt and provide you the cash you need now.

If your credit is less than perfect, compare rates and fees among cash advance or payday loan providers in your area. For collateral loans, a pawn shop might be your best option to get cash in less than 24 hours in exchange for a car title or other valuable item.

Credible is a marketplace where lenders including Avant, LendingClub, PAVE, Prosper and Upstart compete for your business. You can compare personalized offers from multiple lenders on Credible.com without sharing your personal information with lenders or affecting your credit score. Emma Anderson is a journalist and creative writer who has worked in the legal field and enjoys researching various topics.