For 77% of Americans living paycheck to paycheck, a shortfall between paychecks can take their finances for an unexpected plunge. The borrower must find cash fast to cover emerging expenses before the debt alters the borrower's credit score. This can be complicated especially if the borrower is one of the one in three Americans without a savings account. A short term loan gives borrowers cash, normally under $1,000, which is usually required to be repaid within one or two months. The longer the short term loan remains unpaid, the higher the cost of the short term loan. Hence, quickly paying off loans with brief repayment periods is how the account holder benefits most from these types of loans. Although the loan processing fees and extra charges may seem unfair at first glance, the creditor is financing a risky investment. If their borrower is qualified for a personal loan with lower rates and longer terms, a smart borrower would probably choose that financing option. However, most short term loan applicants are those who are lacking a strong enough credit score to be approved for an unsecured personal loan. As stated before, avoiding roll over charges and additional penalties by repaying a short term loan on time makes for a very useful financial tool.