Long-term loans are often more expensive than short-term loans.

Name: Long-term loans are often more expensive than short-term loans.
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Because long-term loans involve larger amounts of funding than short-term loans, they are generally more expensive to the firm than short-term loans are. Also, since the repayment period could be quite long, lenders are not assured that their capital will be repaid in full. Thus most long-term loans require collateral.

Long-Term Loans Are Often More Expensive Than Short-Term Loans