Types of Short-Term Loans in Texas

Thinking of getting a short-term loan? Find out which short-term loan is best for you.

Managing finances could be a challenge. If you’re not careful, you could end up working multiple jobs just to make ends meet. Worse could be that you’re stuck in debt.

It’s a good thing that there are many options in getting financial assistance. Some examples are financial aids (both federal and state), scholarships, corporate or employer funding, and loans.

Most financial assistance caters to help with someone’s education, mortgage payments, or sudden unemployment. There are many federal and state financial aids and scholarships available for these types of needs. However, qualifications are strict.

The same goes for corporate or employer funding. Aside from strict qualifications, most employers need to see a return on investment before they provide any kind of funding for you.

The most flexible type of financial assistance is getting a loan. It’s fairly easy to get a loan because the only major factor is if you can repay your loans on time. There’s no need to specify the purpose of your loan unless you’re applying for a specific type of loan (i.e., mortgage, car dealer loans, etc.).

There are also a lot of banks and lending companies that offer different types of loans. You can freely choose where you get your loan, what type of loans, and what payment options you want.

Types of Loans Available

There are different kinds of loans in the market today, providing multiple options for you. Various factors make up the various loan types, such as collateral, repayment terms, and purpose.

Examples of loans classified by its purpose are student and car loans. You cannot get this type of loan and use the amount you get for a different expense. Instead of discussing more on these types of loans, we’ll focus on two types: collateral and repayment terms.

  1. Secured and Unsecured Loans

    There are two kinds of loans related to the applicant’s collaterals: unsecured and secured.

    Unsecured loans are funds you get without any collaterals. Examples of unsecured loans are signature, personal, and payday loans. You don’t have to provide any guarantee that you can pay your loan aside from the documents you will submit. Most unsecured loans are given by lending companies. However, in banks, you need to have good credit and an account before you can apply.

    Since you don’t have to put up any collateral, unsecured loans are more accessible. Even if you don’t have any assets like owned property, vehicles, or jewelry, you can still get the funds that you need.

    Secured loans are a type of loans that uses collaterals or guarantees. Aside from submitting documents related to your personal information, you put up your asset as a guarantee that you will pay back the loan. Most often, secured loans have lesser interest rates because the lender has more assurance that the loan will be paid back.

    Another reason in choosing a secured loan is that the processing of your loan application is relatively faster. If you have collateral, banks and lending companies will not hesitate to approve your loan.

  2. Long-Term and Short-Term Loans

    When it comes to repayment terms, there are two types of loans: long-term and short-term. As their name implies, both long-term and short-term loans refer to the amount of time you would have in repaying the total loan amount.

    Long-Term loans are paid at a minimum of three years. They can extend up to 25 years or more, depending on the discretion of the lender. A long-term loan may have a fixed interest rate or a variable interest rate. Banks usually give these loans.

    Most banks apply a variable interest rate, especially if the loan extends its maximum repayment term. The variable interest rate or floating interest rate changes over time, depending on the year’s benchmark interest rate or index.

What is a short-term loan?

Short-term loans are paid within two to 18 months. These types of loans can be in small amounts and quickly repaid. Interest rates are fixed since there won’t be any significant changes in the economy within a short period. Both banks and lending companies give out short-term loans.

A great advantage of short-term loans is how quickly you can get them. It’s a great option to amend your temporary financial needs. Unlike long-term loans, there’s not much deliberation when it comes to loan application approval.

Another benefit of getting a short-term loan is paying a low-interest amount. At a glance, it seems like short-term loans have higher interest rates. When you factor in the variable interest rate on a long-term loan, at the end of the repayment period, you would’ve paid a higher interest amount.

Apply for a long-term loan if you need a large amount, such as when you buy a house, car, or expand your business. Short-term loans are better to get when you deal with something unexpected or purchase something that you can pay-off in a short period of time.

When should you get short-term loans?

The answer is whenever you need it the most. The beauty of short-term loans is that it’s readily available when you have sudden or unexpected expenses.

You can apply for a short-term loan to fund your

  • Dream Vacation
  • Home Improvements
  • Business
  • Medical Bills
  • Tuition
  • Personal Expenses

Getting a short-term loan can be helpful in managing your finances. Whether you have sudden or unexpected expenses or need to purchase big-ticket items, getting a short-term loan can help with your overall budgeting.

Different Short-Term Loans

Once you’ve decided to get a short-term loan, you’d need to decide whether you will go for a secured or unsecured loan. There are many options for both kinds. Knowing the different options of short-term loans can help you decide which one suits you.

  1. Auto Title Loans

    Auto Title Loans is a secured loan that uses paid-off vehicles as collateral. In exchange for your vehicle’s title, you can get cash depending on your vehicle’s resale value. You can get cash between $30 to $1,420.

    What type of vehicles can I use as collateral?

    • Car
    • Motorcycles
    • Truck (including semi-trucks and commercial trucks)
    • RV
    • Boat

    A great advantage of getting an auto title loan is that you don’t have to give up your vehicle. You can continue using it. There’s no disruption in your earnings if your vehicle is essential to your work.

    Getting approved for your auto title loan is fairly easy. However, make sure to take note of some reminders:

    • Vehicles with clear titles are the only collateral that is accepted for auto title loans.
    • For a higher loan amount, make sure your vehicle is less than 10 years old.
    • Your name should reflect on your vehicle’s title as the owner. If you are a co-owner, you and the other owner must apply for the loan together.
    • Make sure to submit all the documents required: proof of income, proof of residency, Social Security Number (SSN), and vehicle trade-in documents.

    When you apply for an auto title loan, you are essentially giving up the ownership of your vehicle. But you don’t have to worry! As long as you follow your repayment schedule and pay on time, you won’t have to give it up.

  2. Monthly Installment Loans

    A Monthly Installment Loan is a type of personal loan that grants you fixed payments over a period of months. Another term for this loan is the fixed installment loan. When you need to pay big-ticket items, it’s better to get this type of loan so you can spread the expense in light and small payments.

    Why should you get a monthly installment loan?

    • You’ll be able to make quick payments and catch good deals with your cash-on-hand.
    • Your budget won’t be too disrupted when you make a big expense.
    • You can improve your credit score when you make timely payments.
    • You don’t have to put up any collateral to get a loan.

    You must pass the eligibility requirements to get approved for a monthly installment loan. There are three requirements:

    1. You must have a stable source of income.
    2. You must have proof of residence.
    3. You have no existing unpaid loans.

    As long as you qualify, you can apply for a Monthly Installment Loan. Submit complete requirements, and you won’t have to worry about not getting approved!

  3. Signature Loans

    If you do not have any collateral (or do not want to make a loan using it), you can get a Signature Loan. Also known as a good faith loan, a signature Loan uses your signature as a guarantee. Simply put, you put your signature on a loan with a promise that you will pay it.

    Being reliable, honest, and credible is essential to get approved for a signature loan. Submitting documents with consistent information is key. Unlike other loans, you will also submit character references. Banks and lending companies would contact those references to confirm the data you’ve provided.

    Here are the documents you need to prepare for a signature loan:

    • Loan application
    • Valid ID
    • Social Security Card / Social Security Work Card (TIN #)
    • SSN awards letter (get it online from your mySocialSecurity account)
    • Proof of income (i.e., pay stub, payslip, certificate of employment)
    • Utility bill
    • Six personal references

    Signature loans are perfect for anyone who does not want to put up collateral or have bad credit. If you don’t have a bank account, this is also perfect for you.

  4. Payday Loans

    Payday Loans are funds you get and then pay off in your next payday. Sometimes you need immediate cash, but your salary is not yet ready. You can get the amount you need and pay it off when you receive your salary.

    The amount you can loan depends on your paycheck. You can only get a portion of your paycheck because interest rates will have to be applied. The repayment of payday loans is within 14 days or on your next pay, whichever comes first.

    One of the requirements of getting a payday loan is writing a cheque for the whole amount. Once your due date comes, the lending company will cash the cheque as your repayment.

    Although payday loans are easy-to-get, the high-interest rates and short repayment period make it less attractive than other options. When you default on your payment, getting back on track gets difficult.

    If a cheque does not push through, the lending company will continue to cash it. You incur overdraft charges after each unsuccessful transaction. The bank charges are on top of the loan amount that you need to pay to the lending company. Eventually, you’ll get deeper into debt until you can repay both your bank and the lending company.

  5. Certificate of Deposits Loan

    Commonly known as a CD Loan, a Certificate of Deposit Loan is a secured loan that uses your investment, such as time-deposit, as collateral. Banks are the only institution that can offer this loan because the lender would need access to your bank account.

    CD Loans have lower interest rates than most loans because it has a lesser risk for banks. Banks only grant you a portion of the amount on your CD to ensure that you will be able to pay for the loan.

    Defaulting on a CD Loan could mean losing your entire savings and earnings from the CD that was awarded to you. Since the bank has access to your account, they can easily acquire your account with little effort.

    Another disadvantage of getting a CD loan is that it’s not offered to all banks. If your bank does not offer this, you would need to open a new account to a bank that does.

  6. Pawnbroker Loan

    Pawnbroker loans are a type of secured loan that uses your valuables as collateral. The lender will hold on to the valuables you submitted. Once the loan is paid in full, the lender will return it to you. The amount of money you get depends on the value of the item you will put as collateral.

    You can trade valuables such as jewelry, electronics, musical instruments, and tools for the cash that you need. If you default on your payment, the lender can sell your valuables to get back the funds that were lent to you.

    It’s easy to get a pawnbroker loan because the lender would only need to check if your collateral has value. Aside from a credit agreement form, there’s no other document required from you.

    However, the amount you will get from a pawnbroker loan is very low. Most often, the amount you will get is only a portion of the item’s value. If you default on a pawnbroker loan, there’s a chance you won’t be able to retrieve your collateral.

What Types of Short-Term Loans are the best?

Understanding each type of short-term loan can help you identify which ones are the best.

The Best Secured Loan

The best secured loan is an auto title loan. Unlike a pawnbroker loan or CD loan, you can still keep your vehicle and use it. You also get a good interest rate without the need to repay the loan immediately.

Getting an auto title loan is fairly easy. Once you submit your documents and have them verified by the lending company, your funds will be released.

The Best Unsecured Loan

If you do not want to put up collateral, the best unsecured loans are monthly installment loans and signature loans. Both loans are easy to get with good interest rates.

If you have bad credit, take advantage of the monthly installment loans to get the cash that you need. If you have good credit, you can apply for a signature loan instead. If you don’t have a bank account, you can still avail of these loans.

Unlike payday loans, the repayment terms of both monthly installment loans and signature loans are longer. Your total amount due will be broken into easy and manageable payments over a short period of time. In this way, you’ll be able to plan your expenses well.

Remember: loans are tools to help you manage your finances better. The design of the loan shouldn’t be to keep you in a cycle of debt. Loans such as payday loans or pawnbroker loans can be abused. Defaulting on these loans can put you in greater debt.

Don’t forget to also deal with a local provider that you can trust. One of the most reputable lending companies in Texas is Tiempo Loans. They have been in service of the community for more than two decades.

Tiempo Loans is also licensed and regulated by the Office of Consumer Credit Commissioner (OCCC). They follow guidelines on interest rates and business operations, which guarantee that they do not aim to trap anyone in debt.

Despite the challenges of managing finances, you can count on flexible financial assistance like short-term loans. Understanding all the options available to you can lead to better decision-making on how to budget and deal with your expenses.

Short-term Loans FAQ

How does a short-term loan work?

A short-term loan is designed to be paid back in a short amount of time. A bank or a lending company will provide you with the cash you need after completing the application process. Based on the repayment structure you’ve agreed with, you pay back the loan plus additional fees like acceptance fee and interest.

How can I get a short-term loan in Texas fast?

Apply for a short-term loan from a lending company for faster processing. Unlike banks, you can easily get your loan within a day, provided that you qualify, and you can submit complete documents. Just make sure to deal with lending companies that you can trust like Tiempo Loans.

How do I apply for a short-term loan?

First, fill in an application. You can do this with an online application or by visiting your preferred lender. Next, provide supporting documents or items, and wait for the approval. Once approved, borrowers can get their cash. Approval usually takes 1 to 3 days.

Can I get a short-term loan with bad credit in Texas?

Yes, you can get a short-term loan with lending companies in Texas. Do not go to banks because you’ll either get disapproved or get a terrible interest rate. Make sure to go to a trusted lending company like Tiempo Loans. Do Texas banks offer short-term loans?

Yes, most are called personal loans. These loans can be repaid within 3 to 18 months. However, getting a personal loan from Texas banks can be a challenge. You need to have good credit standing. Also, you need to have an existing bank account with the bank.

If you need cash fast, try going to a lending company like Tiempo Loans. You won’t have to worry about high-interest rates because Tiempo Loans is regulated by the Office of Consumer Credit Commissioner (OCCC).

How can I get a $1000 loan in Texas?

The best option to get a $1000 loan is through auto title loans. Use your vehicle as collateral. The lender can give you a high amount because there’s less risk. Learn more about auto title loans here.

How can I get a short-term loan with bad credit on the same day in Texas?

Go to your trusted lending company, instead of going to banks. Banks focus on your credit scores when you apply for any loan. Lending companies check your credit score but do not use it as the main factor for loan approval. What’s great is that you can get the approval on the same day, provided that you complete the application and submit the required documents.

At Tiempo Loans, you have two options: apply for an Auto Title Loan or a Monthly Installment Loan. Learn more about their services here.

What are quick and reliable short-term loans?

Short-term loans such as Auto Title Loans, Monthly Installment Loans, and Signature Loans are reliable. You can get successful results for these loans as long as you can submit complete documents. Visit www.tiempoloans.com to learn more about these types of short-term loans.