As much as long term loans expose an individual to less risk, people still borrow on a short term basis. This is due to the following reasons;

1. There is a short time for interest to incur. This means that the borrower does not suffer a lot of interest payments. Compared to long term loans, short term loans attract lesser interest.
2. They are easier to acquire. These loans are effective for small businesses that have low credit loans as well as their requirements being easier to meet.
3. Credit score boost- when individuals take and pay off the loans, these loans help boost the credit score of the individual thus helping them create a good credit score.