Many ads for online loans promote both short-term small loans and long-term personal loans. When consumers are unaware of the features of each type of loan, it can be difficult to choose between them. DLL will clear things up for you so that borrowing becomes easier and paying back – less burdening.

What Is a Credit Term?

Before choosing which type of loan suits you best, it is essential to understand the main difference between long and short-term loans. This is the credit term. The full term of a loan refers to the period from the commencement of use until the entire loan amount is repaid in full. It includes the period of use, grace period and maturity.

The period of use of a loan – is the period during which borrowers use the loan to pay for their expenses.

The grace period – is the period from the end of use until the beginning of repayment of the loan.

Maturity refers to the period during which the full payment of principal, interest, and commissions accrued on loan takes place.

Nowadays, lenders are ready to lend money for nearly any type of expense. At the same time, the borrower doesn’t need much effort to collect the few documents needed to get the loan approved and to subsequently regularly repay the debt.

The amount of the monthly payment and the final overpayment will depend on the established term of payment. This is the main difference between short-term and long-term loans.

Short-Term Loans Pros and Cons



Most of the downsides of short-term loans can be solved by borrowing responsibly.

Long-Term Personal Loans – Benefits and Disadvantages



Final thoughts

Both short and long-term loans have their perks. Depending on the situation you are dealing with, each of them may be appropriate. When choosing between short and long-term loans, keep in mind the following:

  1. Whether the situation is an actual emergency;
  2. How much money is needed to solve a problem;
  3. Whether the repayment schedule fits your budget;
  4. Whether your income allows you to pay back the loan;
  5. nterest and fees;