Short- and Long-term Debt

As we have discussed in previous units, short-term debt is debt that is paid back in full within one year, while long-term debt is paid pack in full over a period of longer than one year. Consider the questions below. When ready, click on the question to reveal the answer.

What are some examples of short-term debt?

Short term debt can include loans from friends or family members or a credit card (assuming that you pay it off in full each month).

What are some examples of long-term debt?

Long term debt can include a mortgage, an auto loan, or a student loan. You pay these loans off over a time period of greater than one year.

It is important to not let debt overwhelm you!