The Interest Costs of the Long Term Loan
When you are seeing the long term loan from one side, you are blindsided. Every loan has a risk, even though it is very small. The long term loan is known for its lower rate than short term loan. You are interesting because you will not pay too much for the additional payment. The long term loan is so good with low rate which make people interesting to apply. But, it is not so good in interest costs.
The impact of the interest costs in the long term loan
Long term loans mean you will have longer repayment term. It will make you end up paying the more interest costs. It is one of the risks which you will get when you take the long term loan. The example could be seen from the total costs of mortgage loan. The HSH Associates shows that a $100,000 of 30 year loan at 5 percent has a total repayment cost of $193,255. It means that you will pay double for what you get when you do not make extra payments. Paying twice as much for the product could be a waste of money and it should be a consideration.