How Do You Choose the Best Personal Loan Term for Your Needs?

For anyone in a tough spot with their finances, many available solutions can be used to dig oneself out of a deep hole. Whether you need a big lump sum to handle a large expense or a bit of support to get through until your next payday, there will always be some form of assistance that’s best suited to your needs.

One financial product is especially effective in getting people out of tough spots with their finances: personal loans. These forms of financial assistance have become a saving grace for many because they provide a significant chunk of money much more quickly than other options.

Personal loans can be used for anything a borrower has in mind, from honeymoon expenses and vacations to dental appointments and bill payments. Thanks to the way these solutions work, they allow anyone to handle big expenses with lower interest rates than most credit cards, which is why they’re so popular nowadays.

When you apply for a personal loan with Parkway Finance Company and get approved, you’ll quickly learn that you can repay it in fixed monthly installments. Personal loan term lengths are often incredibly flexible, which can make matters somewhat confusing. This then leads to an important question: How do I choose the best personal loan term length for me?

All About Personal Loan Term Lengths

The length that you pick for your repayment period can seriously affect your experience with your personal loan.

Depending on your choice, you can have a repayment plan that can affect your monthly payment amount because of how much needs to be paid to settle a principal amount. This is why the length you commit to is an important decision to make—it dictates how much you’ll need to shell out for interest rates depending on how much risk a lender is willing to take.

Unlike other types of loans with uniform standards and set rates from beginning to end, personal loans leave the choice of duration in your hands. And together, the factors of interest and monthly payment amounts can make or break your personal loan experience.

Factors to Consider When Choosing a Personal Loan Term Length

Whether you choose anywhere between 12 to 60 months for your personal loan payment plan, there are certain factors you’ll need to consider before making a final choice. If you want to ensure that you maximize your loan without any worries about future difficulties, here’s what you should keep in mind:

1. Lending Fees

It may seem menial at first, but the lending fees you need to settle are critical in your borrowing experience. And the cost of borrowing can be affected by your chosen term length.

Lenders typically charge fees when they issue a personal loan. These expenses are added to an overall loan balance or subtracted from what is disbursed to you. Either way, the cost of borrowing will be expressed in the annual percentage rate.

2. Interest Rates

One of the most critical factors that borrowers should be aware of when choosing a specific repayment term length is the corresponding interest rates and base monthly payments.

When you opt for a longer repayment period for your loan, you can expect to deal with higher interest rates to compensate for the amount of time needed to pay and the lower monthly base repayment amounts. In contrast, shorter periods (such as 12 or 24 months) require much lower interest rates because the majority of the cost of borrowing is already covered. It’s a precarious tightrope you need to balance.


One of the most important things you should know when applying for a personal loan is that the loan term length significantly affects all the other elements of your repayment plan. By understanding the key concepts mentioned above and weighing your options insightfully, you’ll be able to choose the best duration for your preferences and needs.

Parkway Finance Company provides ,personal loans in Center Point, AL. Let us help you make life just a little bit easier. Get in touch with us today to schedule an appointment at your earliest convenience!