Payment term for personal loan: choose the right time!

Did you know that the payment term for personal loan can influence the payment conditions of the product? 

That's right! Depending on the term chosen, you may have lower or higher interest rates, as well as higher or less affordable installments. 

On the other hand, you may spend unnecessary time tied to a debt. However, how do you choose the right term?

After all, are there clear recommendations for this? 

Yes! Continue reading and find out how loan payment terms work, what they are and how to choose the best alternative.

Plus, at the end you’ll find some easy-to-apply personal loan recommendations.

Don't miss out!

What are the repayment terms for personal loans?

There are different payment term options for loans that can be chosen according to the customer's needs and financial capabilities. 

Knowing each of these options is essential to making an informed decision before purchasing this product.

See below the main options available on the market and their advantages and disadvantages. 

Short term

The short term for repaying a loan is usually up to one year. 

This alternative can be a good choice for those who need money quickly and are able to pay higher installments during this short period. 

The advantages of this option are the speed of obtaining the money and a lower total cost of the loan.

This is because the shorter the duration of the contract, the lower the incidence of interest. 

However, the disadvantage is that the installments will be higher, which can compromise the monthly budget.

Therefore, it is important to evaluate this alternative, as taking out a loan with very high installments may mean that you will not be able to pay it off correctly until the end.

Among the consequences involving this condition, we find, for example:

• Payment of interest for delay;
• Default;
• Indebtedness or over-indebtedness.

Average term

O average term for repayment of a loan ranges from one to three years. 

This option is recommended for those who need to borrow a larger amount, but do not have the financial means to pay very high installments. 

The advantages of this alternative are more affordable installments, longer payment terms and, consequently, less impact on the monthly budget. 

However, the disadvantage is that by extending the term of payment for personal loan, the total cost of the product may be higher due to interest. 

Long term

The long term for repaying a loan is more than three years. 

This suggestion is suitable for those who need to borrow a very high amount and want lower installments. 

The advantages of this alternative include more affordable installments and less impact on the monthly budget, in addition to ease in obtaining credit.

However, the disadvantage is that the installments will be smaller, but the total number of installments is greater, which results in higher interest over time.

Furthermore, the applicant may spend many years stuck in debt, which can be uncomfortable. 

Therefore, it is essential to carry out financial planning before applying for a loan with a long repayment term.

This way, you choose installments that don't get in the way or are uncomfortable for your budget, even if it takes many years to pay off the debt.

In short, the choice of loan term will depend on the needs and financial capacity of each client. 

It is important to remember that the shorter the term and the sooner the loan is repaid, the lower the total interest cost will be. 

On the other hand, the longer the term, the higher the total amount paid and the more interest will be added.

Therefore, it is essential to carefully evaluate each option and choose the one that best meets your needs and financial capacity. 

See below for some tips that will help you make the best choice!

Tips for choosing the best term for personal loan repayment 

Choosing the ideal term to pay off a personal loan is an important decision. 

She should consider the client's current and future financial situation. Here are some tips to help you choose the ideal term. 

1. Analyze your monthly payment capacity

Before choosing a loan term, it is important to check your monthly payment capacity. 

Check your budget and calculate how much you can pay monthly without compromising your income.

2. Evaluate the purpose of your loan

The reason for the loan may influence the term chosen. 

For example, if the amount is intended for an emergency expense such as a health care expense, a shorter term may be more appropriate. 

However, if the loan is for investment in a business or something that can have a financial return in the medium/long term, a longer term may be ideal.

3. Consider the interest rate

Lower interest rates may be attractive, but they can mean longer terms. 

Consider whether this is right for you and whether you can afford the installment and interest in the long term.

Shop around and compare to find out which bank or financial institution offers the lowest interest rate. 

This way, even if the payment term for personal loan be longer, the total cost will not weigh on your finances. 

A loan with a high interest rate may not be attractive if the term is long, which can have consequences and disadvantages if you take it out under these conditions.

4. Check if there is a possibility of advance payment or advance payment 

It is important to check whether the loan agreement provides for the possibility of advance or early payment of installments, making it possible to pay off the loan before the scheduled deadline. 

This can be an interesting option for those who have financial resources, allowing you to save on interest and pay off the debt more quickly.

5. Seek professional guidance

If you are not sure about choosing the ideal term and knowing whether that decision will be good for your financial situation, seek help from a financial professional or an accountant to help you with this choice. 

They know the market and can help you make the best decision for your case.

Now that you've read about the main loan payment terms and received tips on how to choose the best alternative, discover some of the best personal loan options on the market. 

Bank of Brazil

Banco do Brasil offers one of the lowest rates on the market for personal loans. The average for this modality is 2.31% am 

O payment term for personal loan at BB it can reach up to 96 months. In addition, the first installment is only due 60 days after signing the contract. 

Another advantage offered by the bank is that you can skip the installment for 1 or 2 months, subject to certain rules.

The loan can be requested online through the BB app, website or even via WhatsApp. 

Then, do a simulation and hire yours! 

BMG Bank

Need quick cash to pay off a debt that can't wait? The personal loan from BMG, will be credited to your account within 24 hours. 

However, it has a difference that can make it more limited: you need to have a bank credit card.

This is because the installments are charged through your credit card statement.

It is important to note that the amount contracted will not be deducted from the card limit, i.e., the limit will remain the same. Only the loan amount will be added to the invoice.

The money may be deposited into your account or another authorized account. 

The installments can last up to 24 months, which shows that it will be a short to medium term payment period.

This loan is only available to customers, if you are not already, download the BMG app and open your account in just a few minutes. 

If you are already a customer, access the app with your username and password and request your personal loan. 

Loans Yes

Yes, it is the digital lending platform of Santander bank. The loan it provides, also known as unsecured loan, 100% can be requested online. 

Interest rates start at 2.83% am and the first installment is due within 45 days. 

The payment term for a Sim personal loan can be paid in up to 36 installments, considered an average term.

The amounts, in turn, can be requested up to R$$30 thousand. Considering the interest rate, maximum amount and payment term, it is important to be cautious with this alternative.

This is because the installments can be high and disrupt your budget. Therefore, be careful when carrying out the simulation. 

Choose an amount that has affordable installments that can be paid until the end of the contract becomes a burden on your monthly budget. 

At fintech Sim, you can get a 10% discount on the interest rate if you set up installment payments for automatic debit.

Losango

Losango is a leading bank in Brazil, being one of the best companies to apply for a loan. 

The reasons involve a safe, trustworthy bank that offers excellent payment conditions to its customers, in addition to good service.

Installments can last up to 36 months, while the amount is personalized for each client, reaching a maximum limit of R$1,400,000.

To find out how much will be released for your profile, you can perform a online request on the Losango portal. 

Conclusion

In this text you found the necessary information to choose the suitable personal loan repayment term. 

In the simulation, you can get an idea of how much the installments would be with the addition of interest. 

Therefore, run the simulation and change some loan details until you get installments and payment terms that suit your needs and payment capacity.