Loan Term
Definition
The loan term is how long you have to repay a loan, usually counted in months or years. It is the main lever between a lower monthly payment and a lower total cost, because the two move in opposite directions.
Spreading the same balance over more months lowers each payment and raises the interest paid across the life of the loan. Shortening the term does the reverse.
Repaying $18,000 over 48 months costs more each month than the same $18,000 over 72 months, and far less in total interest.
Term is also a risk question on secured borrowing. A long term on an asset that loses value can leave you owing more than the asset is worth for part of the schedule.