Difference Between Long Term Loans and Short-Term Loans Direct Lend

The loan amount you borrowed needs to be paid either in short term or long term. The only difference is the time limit you get to repay the borrowed amount along with the interest charged on it. However, there are other variables that need to be considered like amount to be borrowed, loan approval time period, and cost involved.

Borrowing amount

When the repayments are due to be paid within one year, then the borrowing amount has some limitations. On the other hand, loans to be paid in a span of few years will allow you take significant amount, but some lender’s criteria have to be fulfilled.


Repayment structure will depend on applicant’s loan options chosen and affordability.

Short term loans can be taken from direct lenders on BINGOLOANS brokerage platform. Repayment structure can be weekly or monthly. APR rates will be high but in times of emergencies short term loans are real lifesaver. The direct lender gives approval as soon as your eligibility is confirmed and the funds are transferred to your savings account on the same day.

Long term loans hold large amounts, so will need every month payments. The repayment amount each month will be large. The APR rates will be low.

Interest rates

Borrowing cost is the interest rate, which is higher on short term loans. You need to pay interest rate as you are using someone else’s money. The whole year borrowing costs is called annual percentage rate or APR. It is associated with long- and short-term loans. APR helps to compare different lenders on yearly basis. APR for short term seems high as they are paid within a year in comparison to loans repaid across several years.


Whether you want a short- or long-term loan in general there are extra charges involved, which differ from one product to another. Extra charges can be in the form of set-up fees, especially if there is a need to extend repayment past scheduled repayment date. In banks, there can be extra charges in case you desire to pay all the amount early. Ensure to choose a direct lender for short terms loans from reliable brokerage platform like BingoLoans.

Credit scores

People having good credit ratings will not find it hard to gain loans at low interest rates. Even those with bad credit scores can borrow funds but at high interest rates. Good credit indicates to the lender that the borrower is not risky and can be trusted to repay on time.

Short term versus long term

  • Higher loan amount means longer it takes to repay.
  • Short term loan may not need strict credit checks like long term loan applicants need. For example, mortgage loan can demand risk analysis process prior approval, whereas short term is almost instant.
  • As repayment period is short the short-term loans have high interest rate options.

What is the similarity between both?

  • Short term and long-term loan providers must abide to the federal and state’s legal requirements associated with loan. They must have proper licensing and certification.
  • Any kind of loan, you opt for repayment can be either periodic or in lump sum.

Both are vulnerable to legal problems like criminal violations, defaults, and loan frauds.

Direct lenders short loans online offer people to compare different lenders conveniently from home or anywhere.

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