What is short-term & long-term? I read that it is investments of short period (less than one year) and long period respectively, but I cannot realize then what means borrowing/lending short-, long-terms.

I was thinking that borrowing short-, long-terms means buying securities while lending is selling.

1 Answer 1


The textbook definition of short-term is less than one year. Long-term is generally considered anything longer than that.

The short-term lending that most consumers might be familiar with would include pay-day and title loans. It could also include lay-away programs or a few months of installments on a purchase. There are also hard-money lenders who offer larger short-term loans analogous to a mortgage but with much shorter duration.

In most cases short-term borrowing is much costlier than long-term borrowing, which is why more people are familiar with the long-term lending options that are widely available.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.