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Personal loans are repaid in monthly installments over a set period called the loan term. Choosing the right personal loan term is important because it helps determine how much you’ll pay each month and the interest costs overall.
Here’s what you need to know about personal loan terms and how to choose the best one for you.
What is a common personal loan term length?
Personal loan terms are usually from two to seven years, though it varies by lender. Some lenders have one-year loans while others offer specific types of personal loans, like home improvement loans, with repayment periods of 10 years or longer.
» COMPARE: Best personal loans
How term length affects personal loans
The amount of time you have to pay off a personal loan affects your monthly payments and the total interest paid over the life of the loan.
A shorter-term loan has a higher monthly payment but costs less total interest, while a longer-term loan has lower monthly payments and higher interest costs.
For example, on a $10,000 loan with a 15% annual percentage rate (APR) and a three-year term, the monthly payment will be about $347 with $2,480 in total interest. That same loan with a five-year repayment term would have monthly payments of $238 and cost $4,274 in overall interest.
Use this personal loan calculator to see how different term lengths affect a loan’s monthly payment and interest costs.
Loan details
2024
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Your loan estimate
Monthly payment
$212.47
Total principal
$10,000
Total interest payments
$2,748.23
Total loan payments
$12,748.23
Payoff date
05 / 2029
Show amortization schedule
2024
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Feb
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| Payment date | Principal | Interest | Monthly payment | Principal balance |
|---|---|---|---|---|
| May 2024 | $129.14 | $83.33 | $212.47 | $9,870.86 |
| Jun 2024 | $130.21 | $82.26 | $212.47 | $9,740.65 |
| Jul 2024 | $131.30 | $81.17 | $212.47 | $9,609.35 |
| Aug 2024 | $132.39 | $80.08 | $212.47 | $9,476.96 |
| Sep 2024 | $133.50 | $78.97 | $212.47 | $9,343.46 |
| Oct 2024 | $134.61 | $77.86 | $212.47 | $9,208.85 |
| Nov 2024 | $135.73 | $76.74 | $212.47 | $9,073.12 |
| Dec 2024 | $136.86 | $75.61 | $212.47 | $8,936.26 |
| Jan 2025 | $138.00 | $74.47 | $212.47 | $8,798.26 |
| Feb 2025 | $139.15 | $73.32 | $212.47 | $8,659.11 |
| Mar 2025 | $140.31 | $72.16 | $212.47 | $8,518.80 |
| Apr 2025 | $141.48 | $70.99 | $212.47 | $8,377.32 |
| May 2025 | $142.66 | $69.81 | $212.47 | $8,234.66 |
| Jun 2025 | $143.85 | $68.62 | $212.47 | $8,090.81 |
| Jul 2025 | $145.05 | $67.42 | $212.47 | $7,945.76 |
| Aug 2025 | $146.26 | $66.21 | $212.47 | $7,799.51 |
| Sep 2025 | $147.47 | $65.00 | $212.47 | $7,652.03 |
| Oct 2025 | $148.70 | $63.77 | $212.47 | $7,503.33 |
| Nov 2025 | $149.94 | $62.53 | $212.47 | $7,353.39 |
| Dec 2025 | $151.19 | $61.28 | $212.47 | $7,202.20 |
| Jan 2026 | $152.45 | $60.02 | $212.47 | $7,049.74 |
| Feb 2026 | $153.72 | $58.75 | $212.47 | $6,896.02 |
| Mar 2026 | $155.00 | $57.47 | $212.47 | $6,741.02 |
| Apr 2026 | $156.30 | $56.18 | $212.47 | $6,584.72 |
| May 2026 | $157.60 | $54.87 | $212.47 | $6,427.12 |
| Jun 2026 | $158.91 | $53.56 | $212.47 | $6,268.21 |
| Jul 2026 | $160.24 | $52.24 | $212.47 | $6,107.98 |
| Aug 2026 | $161.57 | $50.90 | $212.47 | $5,946.41 |
| Sep 2026 | $162.92 | $49.55 | $212.47 | $5,783.49 |
| Oct 2026 | $164.27 | $48.20 | $212.47 | $5,619.22 |
| Nov 2026 | $165.64 | $46.83 | $212.47 | $5,453.57 |
| Dec 2026 | $167.02 | $45.45 | $212.47 | $5,286.55 |
| Jan 2027 | $168.42 | $44.05 | $212.47 | $5,118.13 |
| Feb 2027 | $169.82 | $42.65 | $212.47 | $4,948.31 |
| Mar 2027 | $171.23 | $41.24 | $212.47 | $4,777.08 |
| Apr 2027 | $172.66 | $39.81 | $212.47 | $4,604.42 |
| May 2027 | $174.10 | $38.37 | $212.47 | $4,430.32 |
| Jun 2027 | $175.55 | $36.92 | $212.47 | $4,254.76 |
| Jul 2027 | $177.01 | $35.46 | $212.47 | $4,077.75 |
| Aug 2027 | $178.49 | $33.98 | $212.47 | $3,899.26 |
| Sep 2027 | $179.98 | $32.49 | $212.47 | $3,719.28 |
| Oct 2027 | $181.48 | $30.99 | $212.47 | $3,537.81 |
| Nov 2027 | $182.99 | $29.48 | $212.47 | $3,354.82 |
| Dec 2027 | $184.51 | $27.96 | $212.47 | $3,170.31 |
| Jan 2028 | $186.05 | $26.42 | $212.47 | $2,984.25 |
| Feb 2028 | $187.60 | $24.87 | $212.47 | $2,796.65 |
| Mar 2028 | $189.17 | $23.31 | $212.47 | $2,607.49 |
| Apr 2028 | $190.74 | $21.73 | $212.47 | $2,416.75 |
| May 2028 | $192.33 | $20.14 | $212.47 | $2,224.42 |
| Jun 2028 | $193.93 | $18.54 | $212.47 | $2,030.48 |
| Jul 2028 | $195.55 | $16.92 | $212.47 | $1,834.93 |
| Aug 2028 | $197.18 | $15.29 | $212.47 | $1,637.75 |
| Sep 2028 | $198.82 | $13.65 | $212.47 | $1,438.93 |
| Oct 2028 | $200.48 | $11.99 | $212.47 | $1,238.45 |
| Nov 2028 | $202.15 | $10.32 | $212.47 | $1,036.30 |
| Dec 2028 | $203.83 | $8.64 | $212.47 | $832.47 |
| Jan 2029 | $205.53 | $6.94 | $212.47 | $626.93 |
| Feb 2029 | $207.25 | $5.22 | $212.47 | $419.69 |
| Mar 2029 | $208.97 | $3.50 | $212.47 | $210.71 |
| Apr 2029 | $210.71 | $1.76 | $212.47 | $0.00 |
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How to choose between shorter and longer loan terms
Try to balance short- and long-term affordability when choosing a loan term. The ideal loan term is the shortest one you can get while still being able to comfortably afford the monthly payments.
A shorter loan term makes sense when:
You want to pay off the loan fast.
You want to save money in interest.
You can afford a higher monthly payment.
You’re borrowing a small amount of money.
A longer loan term makes sense when:
You want to keep monthly payments low for the full loan term.
You’re borrowing a large amount of money and need a longer time to pay it off.
» MORE: Best long-term personal loans
What to consider when choosing a personal loan term
Loan amount: It may be easier to repay a small loan in a short period, but a longer term may be needed to repay a large amount of money. Some lenders, such as LightStream, offer terms of 10 years or longer for home improvement loans.
APR: A lender may offer lower APRs on shorter-term loans because there’s less time for a borrower’s financial situation to change during a short repayment term, which lowers the risk of default. When comparing personal loan offers, take note of the APR at different term lengths.
» MORE: Best personal loan interest rates
Monthly payments: Make sure you can comfortably afford the monthly payment for the full loan term. Many lenders charge late fees for missed payments, and your credit score can drop significantly if you miss a payment by more than 30 days.
Total interest costs: If your offer doesn’t outline the total interest costs, use a personal loan calculator to see how much you’ll pay in total interest for the loan. Gauge whether you feel comfortable with the overall cost of the loan at that term length.
Potential changes to your future budget: Personal loans are typically fixed-rate loans, which means monthly payments stay the same throughout the life of the loan. If you anticipate having less cash flow in the coming months or years, a loan term with lower monthly payments may be the right choice.
How to get a personal loan
Follow these steps to get a personal loan.
Check your credit. Lenders typically use credit score, credit history, income and existing debts to determine if a borrower qualifies for a personal loan. Get a copy of your credit report before applying for a loan to understand what’s influencing your score. You can get your report for free at annualcreditreport.com or on NerdWallet. Dispute credit report errors that could be dragging your score down, such as an incorrect balance on a credit account.
Review your budget. Examine cash flow to see what size monthly payment you can afford. Use a personal loan calculator to determine the loan term and APR that would give you affordable monthly payments.
Pre-qualify. Many lenders let you pre-qualify for a personal loan with no impact to your credit score. Pre-qualifying shows the likelihood of loan approval, plus it gives an estimate of your loan amount, APR, loan term and monthly payments.
Compare offers. Once you’ve pre-qualified with multiple lenders, compare offers to see which best fits your needs. Use APR for an apples-to-apples comparison of the cost of the loan.
Apply. When you’re ready to accept a loan offer, you’ll submit a formal application. You’ll likely need to show documents to verify your identity and income, and the lender will run a hard credit check, which will cause a temporary dip in your credit score. If approved, most lenders will send funds within a week. Some lenders can fund a loan the same or the next day after you’re approved. Your first payment is typically due about 30 days later.
» MORE: Pros and cons of personal loans
Frequently asked questions
How long do you usually have to repay a personal loan?
Personal loan repayment terms are generally two to seven years, but it varies depending on the lender.
Can you get a 10-year personal loan?
Most personal loan terms are capped at five or seven years, but some lenders offer 10-year repayment terms for home improvement projects.
Can you change your personal loan term length?
You usually can’t change the personal loan term, but you may be able to refinance your loan to replace it with a new loan that has a different term. Also, if the lender allows you to temporarily pause payments due to financial hardship, the loan term may be extended to make up for the skipped payments.
Can you pay off a personal loan early?
You can pay off your personal loan early by paying more than the required monthly payment or by making extra payments throughout the month. Most lenders don't charge a prepayment penalty, but it’s a good idea to check the loan agreement just in case.
