disadvantages of short term finance
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Answer:
yes short term finance also as some disadvantages like repayment high cost per month cycle risk some disadvantages of finance
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Disadvantages of short-term finance
* Short-term loans can make you a seasonal borrower. While they are convenient, short-term investments can make you fall into a never-ending cycle of borrowing. Applying for a short-term loan can be made through online facilities, so you’d think that it’s okay to do so as long as you repay your debt on time.
* The amount you can borrow is limited. Short-term lenders allow you to borrow as much as ₱20,000, but is this enough to solve your financial dilemma? If the amount isn’t enough, you may end up borrowing the rest of the amount that you need from other lenders.
* Short-term loans can be expensive for long-term projects. Interest rates change, and a short-term loan can be costly if you have a plan that goes on for a long time. If you make a string of short-term loans to fund your long-term project, there’s a possibility that you may have to pay higher interest rates.
* Opens the possibility for repeated borrowing. Since short-term lending can be paid off in less than a year, there is always a possibility for you to borrow again. Some people even take the opportunity of getting approved even when they are not actually in need of the fund at the moment. Becoming a constant borrower also means you are not getting out of debt and possibilities are you might be applying for an amount higher than what you need.