You'll have a set period of time to repay your personal loan. Loan periods are usually stated in months: 12, 24, 36, 48, or 60. Longer repayment periods lower your monthly loan repayment by dividing the principal amount borrowed by more months, but you'll also pay more in interest than if you had a shorter repayment period because interest is added on per payment.
Your interest rate can be tied to your repayment period as well. You might get a lower interest rate if you finance the loan over a shorter period.
Having an open loan can affect your ability to get approved for other credit cards and loans, so you might not be able to borrow more for an additional two years if you take the loan out for five years rather than three. And it's not always possible to pay the loan off early if you find yourself in this predicament. Some loans have a prepayment penalty for paying off early.
Comentarios