If you want to raise a loan for a short period of time than you can take a short term loan. A short term loan is just for one year or less than one year. Many financial institutions provide short term loans and give many offers. So people take short term loans to save themselves from long term interest dates burden. Nowadays people take loans and give security. In the same way, people pledge their assets and borrow money. pledge assets like van pledge (รับจำนำรถตู้ which is the term in Thai), car pledge, motorcycle pledge. many industrialists take these short term loans for up-gradation of skills and minor technology up-gradation.
Advantages of short term loan
- It is very easy to pay because the span is very less to repay the loan.
- It is very flexible and reduce stress.
- It helps in an increase in credit score. People improve their credit score with the help of short term loans
- The financial weak section takes this short term loan. Because it is easy to pay in a short span of period.
- Lower rates of interest
- It helps to expand the small business. It upgrade technology and skills.
The disadvantage of short term loans
- You get a very limited amount. Because there is a limit of short term loans, the reason being it is paid in a very short period of time.
- It increases the risk to repay the loan. Sometimes people do not earn enough money to repay within in very short term so it increases the risk.
- In case of the pledge the risk is high because once a person fails to repay the loan with interest, his asset would be forfeit by the moneylender.
Everything has its pros and cons. Short terms loans are also having its advantages and disadvantages. But people prefer to take these loans because you can pay it fast.
