Short-term vs Long-term Loans
Compare short-term and long-term personal loans. Understand how loan length affects monthly payments, interest, and total cost.
⏱️
Short-term Loan
- Pay less total interest
- Debt-free faster
- Lower total loan cost
- Build credit quicker
- Less time at risk
- Higher monthly payments
- Less budget flexibility
- May be harder to qualify
- Tighter cash flow
Best For:
Those who can afford higher payments and want to minimize total interest paid
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Long-term Loan
- Lower monthly payments
- Easier to fit in budget
- More borrowing power
- Easier qualification
- More financial flexibility
- Pay more total interest
- In debt longer
- Higher total loan cost
- More time for things to go wrong
Best For:
Those needing lower monthly payments or larger loan amounts
Side-by-Side Comparison
| Feature | Short-term Loan | Long-term Loan |
|---|---|---|
| Monthly Payment | Higher | Lower |
| Total Interest Paid | Less | More |
| Total Loan Cost | Lower | Higher |
| Budget Flexibility | Tighter | More flexible |
| Time to Payoff | Faster | Slower |
| Qualification Ease | Harder | Easier |
| Interest Rate | Often lower | May be higher |
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