How do I choose the right loan term? — Answers

2 min read

Shortest affordableLess total interest

Longer = lower paymentBut more interest

Match the purposeTerm fits the need

The trade-off

A longer term lowers each payment but you pay interest for longer, raising the total. A shorter term costs less overall but demands more each month. The sweet spot is the shortest term your cash flow handles without strain.

Match term to purpose

Match the term to the life of the need: a short bridge for a timing gap, a longer term for a lasting asset. Do not fund a short-term need over years. Read choosing a loan term and use the repayment calculator.

What it means for you

Short as you can afford, matched to the need. Credicorp lends to your company, not to you personally, and takes no personal guarantee. See business loans or apply online.

Frequently asked questions

Is a longer loan term cheaper?

Cheaper each month, but more expensive overall, because you pay interest for longer. The lower monthly payment can be worth it for cash-flow comfort, but weigh it against the extra total cost.

Should the term match what I'm buying?

Ideally, yes. Fund a short-term need over a short term and a lasting asset over a longer one. Financing a brief need over years means paying interest long after the benefit has gone.