An economic need has arisen and you have decided to approach it by asking for an online credit but then the question arises about what you are most interested in: a short-term loan or a long-term loan. Now we explain what exactly each one consists of and we study both the advantages and the disadvantages of an Overdraft loan and Term Loan so that you can decide with discretion which of the two products is more interesting for you.
Overdraft loan is loan which one can easily get from private and government bank. It is so easy to request your personal loan in Term that you can do it from anywhere in the world, you only need to be of legal age, and an Internet connection. Your loan will be transferred to your account immediately once your application is approved.
This is the loan granted by a credit institution for which money is generally transmitted, for its temporary use for the loan by paying interest and commissions.
Despite using the term “bank loan”, we will not refer only to loans granted by banks, but, as usual, also to those formalized by the other parties that mediate in the money credit market. Overdraft loan always have some overdraft limit, above which one can not apply for loan.
Term loan depends upon the duration of the loan. The term of the loan is the time it takes for a loan to be amortized. This time is agreed upon in the loan contract and can be short, medium or long. Different factors are taken into account when determining these terms.
Which option is better?
Both have advantages and disadvantages.
In the case of the installment loan model, the installments are usually paid more easily; on the other hand, we must worry about fulfilling our obligation to pay each week, month or depending on the date on which payment of the fee is stipulated.
With the microloans, when making a one-time refund, we can better calculate when we will have to repay the loan and we even have the possibility to make the refund automatically through our debit card.
Speed: Immediate response to personalized analysis of the request
Term loans in some cases have too many similarities with personal loans offered by traditional banks. Although your application is made online, we often find entities that make it a requirement to send certain documents through postal mail and take several days to respond to their customers, because a risk team analyzes each request in a personalized way.
Term loans are characterized by their speed, being possible to have the money available in our bank account on the same day, without having to send additional documents and doing the whole process online, thus getting an immediate response according to our needs of financing.
Cash credit loan: If you apply for the term loan then cash credit loan play no role but overdraft role depends upon the cash credit limit.