Why are interest rates on long-term loans higher than interest rates on short-term loans?

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asked Aug 15, 2022 91.8k views

2 Answers

Dhrumil Bhankhar · Answer 1 · 2022-08-20T09:11:27+0000

Answer:

The long-term rate is not always higher, just usually. The reason is borrowers will usually pay more to secure long-term funding, while lenders prefer to be able to get their money back earlier.

Explanation:

Why are interest rates on long-term loans higher than interest rates on short-term loans?

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