Short Term Loans in a Tough Economy

Unemployment in Elkhart, Indiana

Short term loans are proving to be a viable option as America’s financial recession persists. One city that is taking the recession harder than most is Elkhart, Indiana. They are currently suffering one of the highest unemployment rates in the nation. Mayor Dick Moore stated, “When [your city has] one in every five unemployed…until you have that happen you don’t really know the true meaning of the word ‘patience.’” Made up predominantly of couple-owned households, Elkhart, Indiana is relying on the one employed spouse to make household payments. This spouse is turning to alternative funding more and more as debt grows and the recession continues.

Elkhart, Indiana has received about $14 million in stimulus funding, and is waiting on more throughout the next few months. Mayor Moore stated, “We have to fill out the forms; we have to be accountable. We’re going over the same hurdles and going through the same hoops we always did for monies that came from the federal government and state, and there are delays in the process.”

Paperwork Delays Funding

The bottom line is that paperwork delays funding, but it cannot be circumvented. For example, Elkhart already requested $2 million from COPS program to employ 10 more policemen and women. The grant would cover their salaries and benefits for three years, along with training. If the money comes to the city by September, the added police force would most likely not be on the streets until February of 2010. The nature of grants is that there are arduous application processes attached, normally under strict deadlines. Once the paperwork is finished and deadlines met, the long waiting process begins.

Once monies are distributed, city officials are still not out of the water in terms of paperwork. A full accounting of the dollars spent must be developed and submitted. Elkhart’s grant director Robin Wenger stated, “Getting the money is just the tip of the iceberg. It is the compliance that is the work.”

Short Term Loan Options

Many consumers are looking to short term loans as an option. Debt is something everyone in the recession has to deal with, and new ways of handling it are becoming more popular. A short term loan can give consumers peace of mind by extending funding to approved applicants. Typically, the application process is simple. With the Internet, the entire process can be done online and a consumer will know almost instantly if they are approved or not. If approved, their loan amount will be granted based on their current salary. Approved customers will find funds deposited directly to their bank account and deducted from the account when the next payday arrives.

For many satisfied customers, this option is a much needed relief. Deborah Matlin of New York, New York said, “Short term loans are helping us pay our bills on time, the same way credit cards used to. The biggest problem is that credit card companies are penalizing us with huge fees if we’re even one day late. [Short term] loans help us to avoid those fees.”

The Economy of the Future

Hopefully when the recession is over, consumers will be once again able to use credit to their advantage. It will take a significant amount of time, however. With the Federal Government busy focusing on the stimulus plan, the bank lending crash and the auto-industry fallout, credit card regulations are slow to be focused on.   They are a priority, but a priority that is on a long list. In the mean time, consumers need to be aware of strategic budgeting options such as payday loans, short term loans and penny-pinching. Until the economy changes, Americans need to be smart and watch out for themselves.

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