Loans agreed with a lender over a set period of time of less than a year, are classed as short-term debt. While loans agreed on for more than a year are classed as long-term debt. For example, a mortgage is a long-term debt as it can take up to 40 years to repay.
Here are some examples of short- and long-term debt:
| Short-term debts |
|
Council Tax |
|
Mobile phone contract |
|
Current account |
|
Utility bills |
|
Credit card |
|
Bank default agreement |
|
Hire purchase |
|
Insurance agreement |
|
Mail order account |
| Long-term debts |
|
Consolidated debt |
|
Fixed-term agreement |
|
Uncategorised agreement |
|
Secured loan |
|
Unsecured loan |
|
Mortgage |