What are 90-day loans?

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A 90-day loan, which requires full payment within three months of the loan’s issue date, is a prime example of a short-term loan. In the consumer lending arena, such short-term financing is typically associated with a payday loan, but actually encompass all loans that have a limited term of only 90 days or less.

Also called a cash advance loan, a payday loan is a personal loan where repayment is typically expected on the borrower’s next pay date. Consequently, most payday loans require a repayment within 15 days, although due date extension are commonly granted when requested. Cash advance and payday loans are typically non-secured types of financing, in contrast with secured loans in which personal property is pledged to the lender as part of the loan agreement.

When classified as a payday loan, a 90-day loan is considered a longer-term payday loan in which installment payments are spread out over 90 days. There are also 60-day and 30-day loans available to consumers when shorter-term funds are needed.

Most 90-day loans typically have the same basic loan requirements as longer-term personal loans that the borrower must fulfill. Almost all 90-day consumer loans still require proof of employment, either with a verbal verification of employment from the borrower’s employer or a copy of a recent paycheck stub showing the borrower’s name, the employer, and the year-to-date earnings. However, there are other 90-day loans that do not require verification of employment, a common occurrence when the borrower is self-employed. Depending on the lender and loan program, the lender may also review the borrower’s credit report and score.

The loan’s term represents the loan’s maturity – or the conclusion of the loan. When the loan’s term ends, the borrower must have repaid the entire principal loan amount, as well as any interest charges and applicable loan fees that have accrued.

90-day payday and personal loans often do not require perfect credit in order to qualify. For example, consumer loans such as payday financing, auto title loans and personal loans may lend to individuals with damaged or less-than-perfect credit.

Types of 90-day loans

If it is an installment loan, a 90-day loan will typically have a predetermined amount that the borrower must pay each payment period – or arrange to have automatically deducted from the borrower’s bank account. The installment periods on a 90-day loan may be monthly, semi-monthly, biweekly or weekly, depending on the lender’s guidelines and available borrower options.

Another common type of short-term, 90-day loan is the bridge loan. As the name suggests, a bridge loan is a temporary loan that is used until a long-term permanent loan is secured and finalized. Commercial bridge loans are often used in real estate development, such as when property investors use 90-day bridge loans to secure a parcel of property until the full purchase loan is secured. Similarly, many home buyers may use short-term financing to purchase a new home – while their current home is still for sale.

A 90-day loan does make for a tight repayment window. But for some consumers with emergency financing needs, that short term may be just the ticket to getting through a short-term challenge or making an important purchase or investment.

Disclaimer: NetCredit is a direct personal loan provider and does not provide financial advice, nor does it vouch for any vendor or service mentioned on our NetCredit personal finance blog or online consumer loan glossary. Always research and perform due diligence on any service provider or vendor before deciding to use them, and we recommend that you speak with a financial advisor regarding all decisions that will affect your finances.

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