Choosing the right type of loan for your personal finance

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Choosing the right type of loan for your personal finance

Posted On : Dec-02-2010 | seen (353) times | Article Word Count : 381 |

If you break down the types of loans that are available, regardless of value, APR or provider, there are essentially two different types of loans you can get – long term and short term.

Both loans carry different responsibilities and you should take this on board before applying for any type of loan. Here we run down the types of loans that are right for you, making a couple of easily understandable bullet points for each.

Short term borrowing

Borrowing money in the short term is great if you are able to pay it back within the allotted time frame. You should also consider the interest rates which tend to be slightly higher than loans over a longer term – what you need to remember is that lenders are out to make money from your borrowing. If they didn’t, they would not be a business.

Take out a short term cash loan if you:

- Want to get hold of the money quickly, usually within hours
- Want the loan to be confidential and not appear on your bank statements

- Do not wish to be subject to a credit status check

These are some fantastic pro points for short term cash lending because it essentially means you can borrow money without questions being asked. Of course, with this comes the responsibility of the borrow to put the money to good use and pay back quickly.

Longer term borrowing

This refers to loans which are taken out over a period of years rather than months, and can go on for up to 20 years. These loans are generally used for big purchases such as a vacation or holiday fund.

Long term loans are best for people with a steady income that don’t mind paying back a little bit extra over the years because the APR rate is lower than a short term loan but you pay back more in the long run.

A couple of bonuses to borrowing in the longer term are:
- Paying it back is flexible and costs less each month
- You can borrow a huge amount of money for pretty much whatever reason

Before applying for a long term loan you should consider what you actually need the money for. If you cannot name at least one genuinely good reason, you should avoid. After all, there is simply no point in getting into debt for no reason.

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<h1>Choosing the right type of loan for your personal finance</h1> Author: <a href='http://www.articleseen.com/profile_matt5409.aspx'>matt5409</a> Both loans carry different responsibilities and you should take this on board before applying for any type of loan. Here we run down the types of loans that are right for you, making a couple of easily understandable bullet points for each.

Short term borrowing

Borrowing money in the short term is great if you are able to pay it back within the allotted time frame. You should also consider the interest rates which tend to be slightly higher than loans over a longer term – what you need to remember is that lenders are out to make money from your borrowing. If they didn’t, they would not be a business.

Take out a short term cash loan if you:

- Want to get hold of the money quickly, usually within hours
- Want the loan to be confidential and not appear on your bank statements

- Do not wish to be subject to a credit status check

These are some fantastic pro points for short term cash lending because it essentially means you can borrow money without questions being asked. Of course, with this comes the responsibility of the borrow to put the money to good use and pay back quickly.

Longer term borrowing

This refers to loans which are taken out over a period of years rather than months, and can go on for up to 20 years. These loans are generally used for big purchases such as a vacation or holiday fund.

Long term loans are best for people with a steady income that don’t mind paying back a little bit extra over the years because the APR rate is lower than a short term loan but you pay back more in the long run.

A couple of bonuses to borrowing in the longer term are:
- Paying it back is flexible and costs less each month 
- You can borrow a huge amount of money for pretty much whatever reason

Before applying for a long term loan you should consider what you actually need the money for. If you cannot name at least one genuinely good reason, you should avoid. After all, there is simply no point in getting into debt for no reason.
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Keywords : short term loans, cash loan, logbook loan,

Category : Finance : Loans

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