The term of a loan refers to the set duration during which the borrower is expected to repay the borrowed funds. This period is specified in the loan agreement and can vary greatly, ranging from short-term loans lasting a few months to long-term loans that extend over 30 years or more. Remember, the length of the term affects both the amount of the payments per month and the total interest paid over time. Shorter terms typically result in higher monthly payments but lower overall interest, while longer terms reduce monthly payments but increase total interest.