Here are the things you need to know about short term cash loan Philippines:
✔ Used for short-term capital needs
✔ Has to be paid in a short period of time
✔ Has high-interest rate
✔ Cannot get from banks
✔ Usually has a floating rate
Here are the things you need to know about long-term loans:
✔ Can be paid from three years to 20 years
✔ Has small interest rate per month
✔ Requires lots of documents for approval
Now, these things are only for guidance. Different companies have different rules. Some of these may overlap.
For example, one can say that long-term loans have higher interest. Well, that is true because the loan’s interest accumulates over time. An annual interest rate of 12% per year can turn into 48% cumulatively in four years.
Short-term rates, however, charge at least 15% of what the borrower owes. Some may even charge 20%, and the loan has to be paid in full in as short as three months. Otherwise, the loaner will have to pay late fees.
Short-term loans are also easier to get. Companies that offer it may approve your loan application within the day. Some will take at least 48 hours.
Long-term loans can take weeks for approval. Banks who offer long-term loans are also likely to look for various documents from you. Overall, it is easier to get short-term loans than to get long-term loans.