The debt repayments terms vary according to the type of debt and the agreement made by the lender and the borrower. Here are the common debt repayment terms according to the various types of debts on the market:
Credit Card Debt –
The common repayment term for credit card debt is a minimum monthly payment that the borrower has to pay. It is a percentage of the outstanding balance.
Personal Loans –
The repayment terms for personal loans are in fixed monthly instalments for a set period. Usually, the time frame ranges from 1 to 5 years. The interest rate is often fixed and borrowers will know the exact amount they need to pay each month.
Mortgage Loans –
Repayment terms for mortgage loans are long, usually around 15 to 30 years. The interest rates are either fixed, variable or interest only.
Student Loans –
Student loans have different repayment terms. The most common ones are standard repayments and income driven repayments.
Car Loans –
Car loans may have fixed monthly instalments over a certain period of time. The time frame usually ranges from 3 to 7 years. The interest rates are either fixed or variable, depending on the lender and the loan terms.
Business Loans –
Business loans have different repayment terms and it depends on the lender and the loan’s purpose. Some business loans have very short repayment periods, while others can last for several years.