Education and Career Forum

what is short term loan?
what is difference between cheque and demand draft?
what is long term loan?
education loan falls under which loan?

Short term loans are the ones in which the repayment period is less and the rate of interest is usually compounded and sometimes even for shorter duration like monthly. For example - loan against credit cards. Long term loans are the ones in which the repayment period is long. Cheque is usually a document signed by the account holder with the amount which can be encashed at any bank by submitting it. On the other hand, demand draft is usually done for an organization wherein you need to pay the bank the requisite amount and the bank will give you demand draft which the organization will encash at its own location. Cheque have the risk of getting bounced while demand draft do not have any such risk. Moreover, cheque amount can be deposited in any account while demand draft can be done only in the account for which it is issued. Education comes under long term loan wherein interest rate is computed as simple interest for the entire study period and the repayment period is usually 10-15 years.