Term

In regards to loans and mortgages, the word "Term" refers to length of the loan repayment period; more specifically the length of time between the issue of the loan and the maturity date or final payment date. The term of a loan can change several times if payments have been missed, new terms were negotiated, if the loan was paid off early or refinancing takes place.

The term of a loan will vary from case to case. Common terms for mortgages include 15 years and 30 years. Small regular loans can have a term anywhere from 6 months to 5 years. There are also short-term loan such as payday loans that are lent out to people that need a quick cash influx and will pay the loan back by their next paycheck.

Recurring terms are used in the credit card industry, generally a month apart. Somebody will spend within their credit limit in one month, and have until the next month to pay it off, or at least the minimum amount listed in the agreement.

If somebody cannot pay off a loan, otherwise known as defaulting and all options have been exhausted, the lender may seek legal action and the loan contract along with the term will be terminated.