How to Get Short Term Loans

Step-by-Step Guide

1. 1

   Step 1: Understand the advantages and disadvantages.

   Personal loans can be a great option for people who don't qualify for a regular bank loan.
   
   They offer flexible repayment structures and lower interest rates for the borrower.
   
   However, things can get messy if the loan is not organized through a loan agreement and repaid on time.
   
   Another concern is the fact that your personal relationship with the person may be at risk if you default on the loan.
   
   Be sure to recognize before borrowing that you are just as responsible for paying back this loan as you would be with a bank loan., Start by approaching a potential lender with a clear idea of how much you need and how quickly you can repay the loan.
   
   This will help the lender establish their expectations for being repaid.
   
   Don't inflate your ability to repay the loan just to get the money; if you can only realistically pay $200 per month, don't say you can pay $400.
   
   This will just lead to strife between you and the borrower down the road.
   
   Also, make sure the lender knows how long it will take you to repay the loan in full., While many family members or friends might lend you the money for free (with no interest rate), you may consider offering to pay interest on the loan if they don't suggest a rate.
   
   This can help convince a lender to lend to you.
   
   In addition, if the loan is for an amount over $14,000, the IRS requires that interest be charged on the loan.
   
   Otherwise, it will be taxed as a gift under IRS regulations.
   
   However, the required interest rate is typically quite low; as of late 2015, the rate was only
   0.42 percent., As a safeguard for both you and the lender, you should draft a loan agreement that spells out the terms of the loan.
   
   This "promissory note" is a contract that shows identifying information for you and the lender (names and addresses), important dates like the start date and repayment dates, the total amount loaned, and each individual payment amount.
   
   It's best to use a pre-made template so that your contract is more legally-binding and accurate.
   
   These template are available online for a small fee from several websites.
2. 2

   Step 2: Communicate your repayment plan to the lender.

3. 3

   Step 3: Negotiate interest.

4. 4

   Step 4: Craft a loan agreement.

Detailed Guide

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