What are the short term loan and long term loan in rbi?
Answers
Answer :
Short-term and long-term loans may refer to the time period in which a loan is paid back. Short term loans are generally to be repaid within a few months or a year or so. Long-term loan repayments can last for a few years up to several years (such as 10-15) years.
Short-term loans are generally associated with a need for quick money in small amounts. Examples of these are cash advance loans and loans derived from peer-to-peer lending. Long-term loans are generally required for larger amounts or for dealing with bigger transactions such as a home purchase loan.
Some loans can either be short term loans or long terms loans, or somewhere in-between. An example of this is with car loans, which can either be for larger amounts or smaller amounts depending on the arrangement.