With the wide range of options available today, there is often confusion in all areas of life. With so many options, each with its own benefits and specifics, how do you know which is best and best for you? This applies to foods as well as to the alternatives to medicines available at the pharmacy, and to various specialists and more and more. The only way to choose the right one from all options is to explore them.
We at Peer Grati have produced information material on two loan alternatives:
- long-term loan;
- short term loan.
Take a look at this article to know which option is right for you in a given situation!
Warm up with a brief definition
A long-term loan is money you borrow with the option of paying it back over a longer period. Typically, long-term credit is selected for pre-planned purchases:
- apartment repair;
- car purchase;
- purchase of new household appliances;
- a wedding or some other big event.
It could be said that long-term loans to prudent people with a stable income can help fulfill a long-held dream, but borrowing must be handled with great care.
A little on short term credit
Knowing what a long-term loan is, it is also necessary to clarify the definition of a short-term loan so that the two can be compared. Short-term credit is a so-called quick credit that is designed to deal with unexpected situations when additional funds are needed, such as:
- a broken car, but it is definitely necessary for everyday use;
- the apartment has a broken water pipe that needs immediate repair;
- trauma or health problems that are more costly to resolve than currently available monetary resources.
Now that you know what short term and long term loans are, let’s take a closer look at what makes them different.
Where to get a loan?
To make it easier to find, you need to know where to look. Quick loans can usually be borrowed remotely – online or via SMS. At Peer Grati, you will receive money in your account within about 10 minutes if you apply for a loan during business hours and the transfer will take place within one bank.
Long term loans are available both online (from non-bank lenders) and bank branches. Long term loans on the internet are a handy solution if you are walking around the store and have a special discount on your purchase today, and this is the right time to buy it.
It will take about 5 to 15 minutes from applying for a loan to making a successful purchase if you apply during the lender’s business hours.
Each house has its own ceiling
To find out which loan is more suitable – fast or long-term loan – look at the maximum amount of loan available. Fast loans are small cash loans, for example, Peer Grati offers up to 425 USD on a first-time borrowed loan, and up to 425 USD after a successful loan repayment.
Long-term loans have a higher maximum available amount. A long-term loan on the Internet is available from $ 1,500 to $ 15,000, but some long-term loans on the Internet are also available up to a maximum of $ 200,000.
However, there is no guarantee that when applying for the maximum amount, a long-term loan will be granted – lenders will carefully assess the financial standing of each client and the amount applied for. In the event that a maximum amount cannot be granted, a smaller amount of long-term credit will be offered.
What is taken must be returned
This is, of course, the maturity of the loan. Quick loans are usually issued for a short period of time, for example, Peer Grati offers a loan of up to 30 days.
A long-term loan itself comes to the fore – it is a longer-term loan. Typically, long-term loans are available with a repayment term of one to two years, but long-term loans with a five-year repayment term are also not uncommon.
Some companies offer long-term loans with an indefinite maturity. Typically, these long-term loans are credit lines.
Long term loan and LEFGA
Do you now know how long-term credit is different from short-term credit? The Latvian Extra Financial Group Association, or LEFGA, unites and monitors non-bank lenders and financial services providers. It is like a guarantee that your long-term loan comes from a safe and reliable lender.
In addition to overseeing non-bank creditors, LEFGA:
- deals with improving the quality of services provided by non-bank creditors;
- raise public awareness of non-bank lenders and the services they provide;
- provides for out-of-court settlement of consumer disputes.
Long Term Credit – Before You Borrow Think!
A long term loan on the internet or at a bank is a serious step as its repayment often fluctuates from one year up to 10 and 20 years and requires monthly repayment of a certain amount to the lender. Before taking this step, you should carefully consider which of the lenders you choose to get the money from and whether it is necessary to do so right now.
How to determine which lender long term loan is the right choice?
To avoid unwanted misunderstandings during the refund process, it is recommended that you carefully review:
- lender. You can of course find key lender information on each lender’s website, but it’s not enough to know how reliable it is. Feedback from clients on the Internet can help, as it is they who will be able to share their own experiences and experts who provide critical and constructive views on lenders, which is very important when choosing a lender;
- the terms of the contract. It is advisable to read the contract, prepared by the lender, from the first to the last word. And, of course, this has to be done before the contract is signed, not just afterwards, so that nothing unexpected is revealed when repaying the loan, because then it will not be possible to make changes to the contract. If something is not fully understood in the contract, any lender customer service specialist will be available to assist with any questions regarding repayment or other contractual matters.
Once you have checked with the lender, it is time to understand whether long-term loans on the Internet are needed right now, and should not be rescheduled and received at a time when your financial situation is more stable.
Loans on the Internet for the Long Term – Now to say yes?
When finding out which lender offers the best deal, it is important to know whether long-term loans are the right solution in the current situation. Before closing your credit, we recommend that you consider whether:
- personal credit history is appropriate. If you have borrowed money in the past but failed to repay as planned or otherwise failed to meet the terms of another loan agreement, your credit history has been damaged and will be taken into consideration by each lender when issuing a long-term loan. You can also check your credit history by visiting one of three registers – Creditreform, Creditinfo or Credit Register of the BankLat;
- this will not have a significant impact on the financial situation. During the repayment, you must follow the repayment terms, which include the repayment period and the monthly amount, and it is important to understand whether this will not complicate your daily life and you will be able to repay the loan on time;
- borrowing is needed now. Long-term loans are a serious decision that needs to be planned and taken on. Do you realize that your income is not stable enough to repay your monthly payments? Then wait until your financial situation is stable!
If long-term loans are the best solution for your situation, make sure that the long-term loan comes from a creditor who is a LEFGA member. Knowledge is important, so share this article with your friends, even though they are informed! Peer Grati recalls – borrow responsibly when evaluating your ability to repay a loan!