What is the term of a business loan? — Answers

2 min read

Repay windowWhat it is

Longer = less/monthBut more total

Match to purposeHow to choose

What it means

The term is the length of the repayment period — a few months for short-term working-capital finance, several years for larger investments. It directly shapes the deal: stretch the term and each payment falls, but you pay interest for longer, raising the total repayable. Shorten it and the reverse holds.

How to choose it

Match the term to the purpose and the asset's life — don't still be paying for stock long after it sold, or for a machine after it's scrapped. Pick the shortest term whose payment your cash flow comfortably carries. See the trade-off clearly with the repayment calculator, comparing total repayable across term lengths, not just the monthly figure.

What it means for you

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 dearer overall — you pay interest for longer. A shorter term costs less in total but demands higher payments. Choose the shortest term your cash flow can comfortably sustain.

Should the term match the asset's life?

Ideally, yes. Financing a short-lived need (stock, a cash gap) over a long term means paying for it long after the benefit is gone. Match the term to how long the thing you're funding will actually last.