You would have to choose between long term and short term loans if you are seeking a loan to meet up with your financial expenditure. Banks, mortgage house and other standard financial institutions are the usual sources of long term loans, while payday and cash advance firms offer short term loans. Here is some basic long term vs. short term loans information to help you understand the difference between the two and make informed choices.
Long term loans have longer maturity dates while payday and cash advance loans usually last for about 14 to 30 days. With long term loans, the lender stretches the amount to be repaid over a longer period of time. With short term loans, the borrower doesn’t have this opportunity but has far less time to repay the loan.
Short term loans involve relatively lesser sums of money compared to long term loans. The lender is thus willing to advance the cash without checking the credit rating of the borrower. Short term loans are thus easier to qualify for and the application to disbursement process is thus faster. Short term loans are thus a great opportunity for people with bad or low credit score who still want to access loans.
A higher percentage of long term loans are secured loans warranting the provision of a security or collateral before the loan application can be approved. On the other hand, a higher percentage of short term loans are unsecured loans that do not require any form of security or collateral.