Loan Lingo – Term
Channel: The Financial Literacy Course
Date: 2021-01-14

The term is the time limit in your race to repay the loan. A short term will mean you make larger payments, pay the loan off faster, and pay less in interest. A longer-term means a lower monthly payment, but it comes at the cost of paying more in interest. 

Regardless of the term, you have the freedom to make larger payments and pay off the loan sooner.

How much can you save by either choosing a shorter term or paying extra on principle?