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What Are Advantages Of A Medium Term Loan?

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Phil Newton Profile
Phil Newton answered

There are a variety of advantages of medium term loans, but there are also some disadvantages, too.  I'll try to outline some of these in more detail below:

Advantages of a medium term loan

  1. A medium term loan usually means that you'll be borrowing a larger sum of money than you would with a short term loan.  If you're starting a business, for example, this is an advantage as you'll know that you have enough money to work with in one lump sum.
  2. Medium term loans are paid back over a longer period than short term loans, and therefore for the most part, you'll be paying back lower monthly instalments.
  3. There are a variety of competitive rates of interest on medium term loans, and some of them are fixed, so you could be getting a great rate for a long period of time.

Disadvantages of medium term loan

  1. Although I highlighted that you'll be paying less back each month, it does mean that you'll pay more interest overall, as you're not clearing your loan as quickly as you would with a short term loan.
  2. If you're applying for a medium term business loan, you'll often be borrowing less than a longer term loan, which will ensure you have enough money for your project. 

There are many things to consider when applying for a loan.  The main thing to calculate is the amount you'll need, and whether you can actually afford to pay the monthly instalments. 

Rowan Webb Profile
Rowan Webb answered

I think that @phil newton has the most comprehensive answer to this. But basically when you're considering the length of your loan, you have to take into consideration how the payment amount will be affected. Longer tenures generally equate to smaller payments but you end up paying higher interest over time.

Laura Schmid Profile
Laura Schmid answered

Medium term loans are just of of the varieties of loan and not just the typical act of borrowing from a moneylender.

It is generally regarded as a loan with payback period of about 1 -5 years.

Karl Sagan Profile
Karl Sagan answered

The difficult financial situation led to the fact that I urgently needed a loan to pay for car repairs and I wrote an application online quick-loans.com.au, as my Bank accounts are in good condition, I very quickly approved the loan and I successfully came out of this situation.

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