Loan Term
The length of time you have to repay a loan, typically expressed in months or years.
What You Need to Know
Loan term is the duration over which you'll make payments to fully repay your loan. It's one of the most important factors in determining your monthly payment and total cost.
Common Loan Terms:
- Auto loans: 24-84 months (2-7 years)
- RV loans: 120-240 months (10-20 years)
- Camper van loans: 60-240 months (5-20 years)
- Mortgages: 180-360 months (15-30 years)
Term Impact on Payments:
- Shorter term: Higher monthly payments, less total interest
- Longer term: Lower monthly payments, more total interest
- Example: $50,000 loan at 7% APR
- 5 years: $990/month, $9,400 total interest
- 10 years: $581/month, $19,720 total interest
Choosing the Right Term:
- Budget considerations: Can you afford higher payments?
- Total cost: Longer terms cost more overall
- Depreciation risk: Shorter terms reduce negative equity
- Interest rates: Longer terms may have higher rates
Term Flexibility:
- Most loans allow extra payments
- Can often refinance to different terms
- Some lenders offer flexible payment options
Sources & References
This information is sourced from authoritative government and academic institutions:
- consumerfinance.gov
https://www.consumerfinance.gov/ask-cfpb/
Related Calculators & Tools
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Related Terms in Debt & Credit
APR (Annual Percentage Rate)
The total yearly cost of borrowing money, including interest and fees, expressed as a percentage.
Amortization
The process of paying off a loan through regular payments that cover both principal and interest.
Annual Fee
Yearly charge for having a credit card—$0 to $550+. Premium cards charge fees but offer rewards that can exceed cost for high spenders.
BNPL (Buy Now, Pay Later)
A short-term financing option that lets you split purchases into installment payments (usually 4 payments over 6 weeks) with little or no interest—if you pay on time.
Balance Transfer
Moving credit card debt from one card to another, typically to take advantage of a lower interest rate or 0% promotional APR.
Balance Transfer Fee
One-time charge (3-5%) to transfer debt to 0% APR card. $5K balance = $150-250 fee. Must save more than fee to make transfer worthwhile.