Long or Short? What Loan is Right for You
The words short and long are polarizing opposites
, so are short-term and long-term loans. There are a great many differences between these types of loans. If you are looking for a loan, it's important to understand these differences. Once you understand the differences, you can get a loan that best fits your need.
Long-term loans are typically used to finance a large purchase or start a business. Long-term loans are generally taken out when one buys a home, a car, a boat, or some other big purchase. These loans are typically made or taken from a FDIC insured bank. The loans are normally secured. A secured loan is a loan backed by some form of collateral. The collateral can be property, land, equipment or even an automobile. In essence, you have to have an asset before you can get the money. These types of loans can be used as an investment tool. Investors will take out the loan for something they're sure is going to be worth in the future. The typical long-term loan amount can vary greatly. It can be in the range of a few thousand dollars to a few hundred thousand dollars. Banks want to be sure they are lending to the right applicant. Therefore there is normally a thorough and lengthy application process. The process can take up to a month or two. Generally speaking, the larger the loan is, the more thorough the application process. Banks or lenders with investigate into every aspect of your credit history. Items such as failing to pay bills on time, defaulting on previous loans, or simply not having enough income can all reduce the likelihood or being approved for a long-term loan. The loans generally have a fixed interest rate. The long-term loan pay back period is typically between three to 30 years.
Short-term loans, or cash advances, are typically used for an immediate and temporary financial need such as a medical bill, car repair or other expenses due before your payday. Short-term loans are generally taken out from certified payday loan lenders. Generally the application process is very short. The lenders typically do not perform in-depth credit checks. Payday loan lenders will work with people who have had or currently have credit issues. The short-term loan amount is usually between $300 and $1,500 from most payday loan companies. As the name applies, short-term loans are usually paid back within a short time frame, typically within week or two. Payday loan lenders will generally schedule the date the loan is due on your next payday. Often, no physical assets are needed to be used collateral. The loan amount will vary depending on a variety of factors, such as income levels and past performance with the lender. The short-term loan was developed as a tool to help people out of an emergency or a difficult situation.
Long or Short? What Loan is Right for You
By: P. Brett
Avoid Getting A Loan If Possible Sifting Through a Number of Loan Information Why Consider Personal Secured Loans How to make 1 clickbank sale per day How to Acquire a Secured Loan to Help You Save Money! Don't Neglect Mortgage Protection - It Keeps You Dry! Want a Payday Loan? Go Faxless Do You Need A No Fax Payday Loan? Understanding Secured Loans What You Need To Know When You Apply For A Loan How To Know If It's Time For That Mortgage Refi Is There A Right Time To Refi Your Second Mortgage? How to Open a Bank Account