There are many borrowers who are torn between long and short term loans. It’s easy to see why there are so many a little confused over which loan they should be turning to. You have two very good borrowing options but knowing which the exact loan is for you, it’s not easy. It’s very important to decide carefully because the wrong loan could potentially damage your credit. So, short term vs. long term: which loan is the one for you?
How Much Do You Need to Borrow?
First, you need to think about how much money you are going to borrow. Do you need to borrow a larger amount of money or a smaller amount? This aspect matters because, the more you need to borrow, the longer you might need to pay it back. For example, if you are borrowing a few hundred dollars, you might not need any longer than four to six months to repay it. If that’s the case, you only really need a short term loan. However, if you are borrowing larger sums—say thousands of dollars—then it’s more likely you’ll need a long term loan. Remember, you can go to a short term loan lender and get approval but if you need more money, a short term loan isn’t right for you.
How Long Do You Need to Pay the Loan Back?
Anyone who wants to take a year or more to pay back a loan might be better looking toward a long term loan. Remember, if you feel you aren’t able to pay the money back within a few months period then you are going to need a long term loan rather than a short term. However, if you are borrowing a smaller sum and feel as though you’re able to pay back within a few months, short term loans might be the more suitable option. Long term loans are great too but having one hang over your head can be very troubling and worrying to say the least.
Think Carefully Before Applying for a Loan
When it comes down to it, you have to understand what a long term loan entails and what a short term loan entails in order to find the suitable loan for you. It’s really difficult to know for sure which loans are best and there are times when you think you’ll need one loan when in reality you need another. Long term loans can be great and since you have a longer payment time, you can feel more comfortable with them but that doesn’t mean to say they work for every borrower. It’s the same with a short term loan. You can get approval from a short term loan lender faster but if you can’t pay the money back within a few months, it’s not the right loan for you.
Get the Right Loan
When you need a loan, it’s hard to know which way to turn. You have two very good loan options to consider and they can both appear very good for you. At the end of the day you have to go by what’s going to be best for your financial situation. It’s important to know your finances and your abilities to repay a loan too and that might help you decide which type of loan you need. Long and short term loans are both viable options but just remember to choose the most appropriate one for you.