The period of time during which the personal loan or business loan must be repaid is referred to as loan term. Depending on the loan term, the monthly instalments (monthly rates) are calculated: The longer the term, the lower the monthly instalments. When the loan term is shorter, the monthly instalments increase.
The following applies to the total loan costs: The longer the loan term, the higher the costs. The shorter the term, the lower the cost of the loan.
The usual term of a personal loan is between 12 and 72 months. To keep the costs of the loan low, it is best to pay it off as quickly as possible, i.e. choose a short term.