What are Installment and Short Term Loans?
What are installment loans?
Installment loans are a type of consumer or business loan by which the principal and interest payments are repaid in equal instalments at fixed intervals, typically on a monthly basis. These loans are commonly secured according to the item/s to be purchased or by personal property (not including real estate) of the borrower. Personal property is movable and can either be tangible, like a car, or intangible, such as bonds or shares of stock. These are typically used for purchasing cars or equipment, or for funding vacations.
What are short term loans?
Short term loans are loans that typically mature within a 12 month period. Many of these loans, however, are repaid in as short as 90-120 days, as their interest rates are higher than long term loans and could vary from one lending institution to another. Short term loans are good loan options you can use to cover temporary cash flow deficiencies for cyclical businesses or to meet financial obligations while waiting for your accounts receivables to come in.