Profit and Loss Take On a Short Tenor Loan

06 Feb 2018 by Edwin
short tenor loan
short tenor loan

Borrowing money in a loan service needs to be done wisely, taking a short tenor loan, or with a long period of time? Each option has its own advantages.

If we talking about a short tenor loan, then we should be talking about the readiness for installment payments that the amount is certainly high enough. Yes, obviously, the shorter the tenor, the bigger the installment. Vice versa. The longer the tenor, the lighter the installment.

You need to know the advantages of taking out a loan with a short tenor. And you also need to know the losses that will arise when taking a loan with a short tenor.

Advantages

Taking a short term loan will give you benefits such as:

  1. Your debt will be paid off sooner
  2. Interest is much smaller when compared to long-term tenor
  3. Inner satisfaction

But of course, the short tenor also has some disadvantages, such as:

Loss

Some of the losses that can occur if you take a loan with short-term tenor include:

  1. The size of monthly dependents is quite large
    The consequence of this is the vulnerability of non-performing loans. This happens because the short-term loan will result in the allocation of income will be absorbed large enough to pay off the loan.
  2. Not suitable for those of you who want to use the funds to open a business
    A business can not instantly make a profit. Therefore, the short-term loan is not a funding solution. Especially to open a business often have to spend additional funds.There are many cases where the borrower can’t afford to pay the tenor because the money that should be paid must be used to sustain the business. This is one of the causes of the frequent cases of loans problem.
  3. More Difficult to Get Loans
    Short tenors are more difficult to get funding. Especially if the income history in your account is not in accordance with the standards set by the bank.

To overcome this, some ways you can do is to:

– report additional earnings in your financial statements
– reduce the amount of the loan
– accept a longer loan proposal

That is some of the advantages and disadvantages of choosing a loan scheme with the short term. However, borrowing money must be smart. You can take advantage of short tenor loans in KreditPintar as an alternative funding, and hopefully, you will find the answers you need.