Personal loan services are well-established due to their versatility. This flexible nature of the loans ranges from their amount to the repayment methods; these are some of the most utilized fund sources. A person can apply for a loan with their required amount and pay it back in accordance with their comfort and lender terms.
Among the major types of personal loans, the short term and the long term loans are the most prevailing and have their advantages. On one hand, the long personal loans can increase your credit score and make your EMIs economical. While the short personal loans can get you less interest rate during repayment. Here, we will discuss the short term and long term loans provided by the online broker websites, like fresh loan :
Short Term Loan
When your credit line is not acceptable for the long duration loans available online, you can try your application to acquire the short term ones. The repayment process is completed within a year; this is taken to fulfill the sudden fund demand by any source. With loan brokering websites, you can easily and quickly get the loan amount from interested lenders on their platform. This will gratify the capital requirement and won’t be a trouble in the long run.
Long Term Loan
This loan is obtained from the financers and lenders of the accrued amount by the borrower. It has a preordained repayment and a changeable interest rate is long term personal loan. This loan is ideal for individuals that have fixed income and fitting financial statements. These types of loans might as well put up a need for front money, to lower the payment and overall charges imposed with loan terms and conditions by the granter.
Dissimilarities in Short and Long Term Loan
The short and long term personal loans get their names from their varying repayment durations. While the short term loans take from a few months to maximum a year for reimbursement. The repaying of long term loans can take up years, like 10 years or 15 years. They both are done in installment form, usually, since most financers approve of this method.
The short personal loans are commonly linked with the requirement of money for an unexpected situation; like repaying of debt from the peer. Long personal loans are taken if the amount of loan if high or when transacting with larger deals like home and vehicle loans. Both these loan types can be accessed with online loan brokers like fresh loan.
Some other differences between the Short Term and Long Term Loans
Apart from the reimbursement methods and durations, a few other important differences between these two loan types set them apart and make them useful:
Total Amount
As mentioned previously, the long personal loans can provide the borrower an opportunity to get a higher loan amount that the short personal loans. Although, the required amount by the asker, will first be approved by the lenders on broker websites like fresh loan; after which the further process will be administered. Most times, the loan amount sanction, loan type, and offers are determined by the lenders and borrowers have to select from these.
Loan Interest
There is no funding service in the professional sector, which does not require the borrower to pay back the amount along with the added interest rates. These additional charges excluding loan fees, if any, are applied by the granters based on their policies. The interest rates also differ based on the loan type, as in short or long term loan. The long term loans fall back here since they have a higher interest rate applied to the total loan amount. Contrastingly, the short term loans are repaid in brief duration hence they have less interest rate added to the loan.
Eligibility Conditions
It is evident that borrowers with strong fiscal backup are considered to be acceptable for long personal loans. This is due to a fact the lenders face the threat of no proper repayment when lengthening the loan durations. When extended, the lenders should have proper knowledge of the borrowers and their financial ability to pay back the loan in the decided time. This means that people, that have robust earning and reliable credit score, are ideal for such loans.
After comparing various aspects of these loan types, one can easily understand the difference between them. One can perceive that if the obtained loan amount is higher, it will take a longer repayment duration. Both loans are provided to assist borrowers in several situations. These loans, both short term, and long term can be availed on the fresh loan website, an online broker to help you in the loan acquisition process.