Short vs Long Loan

What is a short-term loan?

In the United States, short-term loans mean cash loans that are issued by payday lending companies, banks, pawnshops or credit cooperatives for up to 12 months. Basically, such loans serve the circulation of capital and the current needs of clients (purchase of goods, training, treatment, repairs).

A short-term loan can be issued secured by real estate, a vehicle or other valuable things.

Features of a short-term loan

Short-term loans differ from conventional financing not only in that they are repaid for a short term. They require a minimum package of documents, and the application can be approved without providing a certificate of income.

In addition, short-term loans are issued at an increased interest rate, and their registration takes place according to a simplified scheme. It takes no more than 30 minutes to issue a loan.

Such a lending scheme has a big disadvantage – the lender takes a lot of risk, and the risk “tranfers” into the amount of remuneration that falls on the shoulders of the borrower.

Registration and terms

Payday lenders put forward the following requirements for borrowers:

  • age threshold – from 18 to 80 years old;
  • citizenship – US;
  • full legal capacity;
  • the presence of registration in the country;
  • availability of income (official or unofficial);
  • no conviction for serious crimes (fraud, terrorism).

You will need an active email and mobile phone to take out a loan.

As for documents, payday lending companies request ID data (they need to be entered when filling out the application), and a scan of the document will also be required. If necessary, company employees may be asked to provide another identity document: medical policy, pension certificate, military ID, etc.

Short-term loans can be borrowed at favorable terms. True, the borrowing period is calculated not in months, but in weeks or days. The loan amount is minimal.

Pros and cons of a short-term loan

A short-term loan has both positive and negative sides.


  • speed of receipt – from a few minutes to 24 business hours;
  • issuing funds to clients with any credit history;
  • the opportunity to issue funds for students, women on maternity leave, unemployed citizens;
  • minimum package of documents. Most often, an ID or a driver’s license data is sufficient (for remote registration).


  • high interest rate;
  • small loan size;
  • short loan term.

When issuing a short-term loan, there is a minimal rate of refusals, which significantly increases the borrower’s chances of the application’s approval.

What is a long-term loan?

A long term loan is a financial solution with a longer maturity and a larger amount to apply for. Most often, a long-term loan is issued from $100 to several tens of thousands of dollar with a maturity of up to 60 months or more.

When applying for this type of loan online, a person can indicate not only the desired loan amount, but also the amount of the monthly payment, which, in turn, determines the length of the repayment period. The larger the amount, the longer the total payment term. The amounts and terms of monthly payments are fixed, so a person has the opportunity to plan a budget in a timely manner.

Is online long-term loan safe?

Long-term loans are usually available from both bank and non-bank lending institutions. Each of them has its own terms for issuing a loan. In most cases, a long-term loan can be applied for online, i.e. the agreement can be signed digitally, but larger long-term loans require a visit to the lending institution’s office.

Why borrow money directly online? In order to receive money online, neither the opening hours of the chosen institution, nor the fact that the institution is open only on weekdays – borrow when you need it!

Long-term loans on the Internet are a modern solution. Don’t worry – a long term loan is a safe choice. Long-term loans are a proven solution available to everyone.

How is a long-term loan different from other types of loans?

Long-term loans on the Internet are the opposite of short-term loans. Compared to short-term options, long-term loans offer larger amounts as well as longer maturities.

Long-term loans are characterized by gradual repayment and lower monthly amounts, while short-term loans can only be repaid within 30 days. The interest rate provided also tends to vary.

Short-term loans usually do not require collateral and their use is usually different from using long-term loans.

For what purposes is a long-term loan intended?

Another difference between short term and long term loans is how they are used. A short-term loan or quick loan is mainly used for urgent needs. Such a financial decision can be made if an additional amount is needed to cover daily expenses.

On the contrary, long-term loans are suitable for the implementation of larger ideas. The most popular causes to apply for a long-term loan:

  • home repairs;
  • money to buy furniture;
  • a loan for the purchase of a car;
  • money for medical services;
  • car service;
  • additional amount for larger items.

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