Finance Glossary
Loan Term
The agreed length of time over which a loan must be fully repaid. Loan terms for short-term loans in the UK typically range from one month to 24 months, while personal loans can run from one to seven years. A longer loan term reduces monthly payments but increases the total interest paid over the life of the loan.
Example
A £2,000 loan at 29.9% APR over 12 months costs less in total interest than the same loan over 36 months, even though the monthly payments are higher.
Related terms
Amortisation
The process of gradually paying off a loan through regular s…
Instalment Loan
A loan repaid in regular, fixed instalments (usually monthly…
Total Amount Repayable
The complete sum you will pay back over the life of a loan, …
Early Repayment Charge
A fee charged by some lenders if you repay a loan before the…
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