Loan Tenor
Table of Contents:
Definition of Loan Tenor
Loan tenor, also known as loan term or loan duration, refers to the specified period over which a borrower agrees to repay a loan.
It indicates the length of time within which the borrower is obligated to make regular payments to the lender, covering both principal and interest. The loan tenor can vary depending on the type of loan and the agreement between the borrower and lender. A longer tenor may result in lower monthly payments but higher total interest paid, while a shorter tenor leads to higher monthly payments but lower overall interest.
What is Loan Tenor?
Loan tenor is the duration or length of time for which a borrower commits to repaying a loan.
It outlines the period during which the borrower is responsible for making scheduled payments to the lender, encompassing both the repayment of the principal amount borrowed and the associated interest.
Loan tenor can be short-term (e.g., a few months) or long-term (e.g., several years), depending on the type of loan and the terms agreed upon.
The choice of loan tenor affects the borrower's monthly payment amounts and the total cost of borrowing.
