Difference between Short Term and Long Term Loans
[/u][/i][/b]
Short Term Loans
[/size]
hort term loans are generally up to about three years. A popular short term loan is a payday loan. Someone may take a payday loan out in the event of an emergency such as car repairs, taking a vacation, or other unexpected bills.These are very popular because of the few requirements needed to be approved for the loan. Unlike a long term loan, you can get cash within 48 hours from companies like Online Payday Loans.net and there are no credit checks. These loans are generally up to $2000.
Another popular short term loan is a flexible loan. This is generally a credit based loan, but up to $25,000. The term is generally 12 months. Short term loans are at a higher interest rate than a long term loan, capitalizing on the length of your loan. A lender will use the situation that you do not have credit in order to offer the higher interest rate.
Long Term Loans
[/size]
Long term loans can be taken over an extended amount of time. Most common long term loans are mortgages, student loans, wedding loans, start-up business loans, and home improvement loans. A long term loan is credit based. The better your credit score the better your interest rates will be. A long term loan can be in the form of a secure or an unsecured loan.Taking a long term loan is generally through a bank or credit union, unlike a short term loan. The amount of the loan will be based on your credit history and current income. With long term loans, you have greater flexibility with payment options.An adjustable rate mortgage loan’s rate can adjust every year. There is also an interest only loan, of which a person can pay only the interest of the loan for a set amount of years, and then start paying on the principal.
source :
http://www.onmoneymaking.com/difference-between-short-term-and-long-term-loans.html
