On top of paying back the short-term loan balance, the interest payments can lead to higher payments every month. However, keep in mind that with a short-term loan, you’ll be paying back the lender within a short period of time—which means you’ll be paying the high interest for a shorter time than with a long-term loan. The longer you owe, the more interest you have to pay. Long-term loans may have lower interest rates, but you’ll be paying them over several years. So, depending on your terms, a short-term loan may actually be cheaper in the long run.