The term of a Credits is the **Duration of repayment** of the borrowed amount of money. Thereby the **Duration **in a credit agreement **binding**. A** longer runtime e**rallows the borrower to repay the loan amount in **smaller rates** to be repaid, while a** shorter term** to **higher monthly installments** and faster repayment. The term of a loan can be extended by a **Repayment rate changes**l be raised or lowered. In addition allow **special repayments**, to reduce the loan term by repaying the loan in advance.

## Repayment Term: Table

What you can learn here

- 1 Repayment Term: Table
- 2 Calculate term of a loan by interest rate and repayment rate
- 3 Formula to calculate the term of a loan:
- 4 Check installment amount and term with budget calculation
- 5 The term of different types of credit
- 6 What are the credit terms in summary
- 7 Influence of the repayment period on the credit conditions
- 8 What should be the maximum duration of the loan?
- 9 How long does it take to pay off 200,000 euros?
- 10 How long does one pay off 400,000 euros?
- 11 How much do you pay for 500,000 credit?
- 12 How much credit can you get with €2,500 net?
- 13 How much credit can you get with €3,000 net?
- 14 How much credit do you get at €4,000 net?

In the following table you will find the term of repayment of the loan for different debit interest rates. The table reads as follows: For a repayment rate of 1% and a debit interest rate of 3,5 % the term until the loan is repaid in full is as follows 43 years and 8 months.

Debit interest 0.5 % | Debit interest 1 % | Debit interest 1.5 % | Debit interest 2 % | Debit interest 2.5 % | Debit interest 3 % | Debit interest 3.5 % | Debit interest 4 % | Debit interest 4.5 % | Debit interest 5 % | Debit interest 5.5 % | Debit interest 6 % | |
---|---|---|---|---|---|---|---|---|---|---|---|---|

Redemption 1% | 81 years and 3 months | 69 years and 7 months | 61 years and 6 months | 55 years and 5 months | 50 years and 8 months | 46 years and 10 months | 43 years and 8 months | 41 years and 0 months | 38 years and 8 months | 36 years and 8 months | 34 years and 11 months | 33 years and 4 months |

Redemption 1.5% | 57 years and 8 months | 51 years and 4 months | 46 years and 6 months | 42 years and 9 months | 39 years and 8 months | 37 years and 2 months | 34 years and 11 months | 33 years and 1 months | 31 years and 5 months | 30 years and 0 months | 28 years and 9 months | 27 years and 7 months |

Redemption 2% | 44 years and 8 months | 40 years and 8 months | 37 years and 7 months | 35 years and 0 months | 32 years and 10 months | 30 years and 11 months | 29 years and 4 months | 28 years and 0 months | 26 years and 9 months | 25 years and 8 months | 24 years and 8 months | 23 years and 9 months |

Redemption 2.5% | 36 years and 6 months | 33 years and 9 months | 31 years and 6 months | 29 years and 8 months | 28 years and 0 months | 26 years and 8 months | 25 years and 5 months | 24 years and 4 months | 23 years and 4 months | 22 years and 6 months | 21 years and 8 months | 21 years and 0 months |

Repayment 3% | 30 years and 10 months | 28 years and 10 months | 27 years and 2 months | 25 years and 9 months | 24 years and 6 months | 23 years and 5 months | 22 years and 5 months | 21 years and 7 months | 20 years and 9 months | 20 years and 1 months | 19 years and 5 months | 18 years and 10 months |

Redemption 3.5% | 26 years and 9 months | 25 years and 3 months | 23 years and 11 months | 22 years and 9 months | 21 years and 9 months | 20 years and 11 months | 20 years and 1 months | 19 years and 5 months | 18 years and 9 months | 18 years and 2 months | 17 years and 7 months | 17 years and 1 months |

Redemption 4.0% | 23 years and 7 months | 22 years and 5 months | 21 years and 4 months | 20 years and 5 months | 19 years and 7 months | 18 years and 11 months | 18 years and 3 months | 17 years and 8 months | 17 years and 1 months | 16 years and 7 months | 16 years and 1 months | 15 years and 8 months |

Redemption 4.5% | 21 years and 1 months | 20 years and 2 months | 19 years and 3 months | 18 years and 6 months | 17 years and 10 months | 17 years and 3 months | 16 years and 8 months | 16 years and 2 months | 15 years and 8 months | 15 years and 3 months | 14 years and 10 months | 14 years and 6 months |

Redemption 5% | 19 years and 1 months | 18 years and 3 months | 17 years and 7 months | 16 years and 11 months | 16 years and 5 months | 15 years and 10 months | 15 years and 5 months | 14 years and 11 months | 14 years and 6 months | 14 years and 2 months | 13 years and 10 months | 13 years and 6 months |

Redemption 5.5% | 17 years and 5 months | 16 years and 9 months | 16 years and 2 months | 15 years and 7 months | 15 years and 2 months | 14 years and 8 months | 14 years and 3 months | 13 years and 11 months | 13 years and 6 months | 13 years and 3 months | 12 years and 11 months | 12 years and 7 months |

Redemption 6.0% | 16 years and 0 months | 15 years and 5 months | 14 years and 11 months | 14 years and 6 months | 14 years and 1 months | 13 years and 8 months | 13 years and 4 months | 13 years and 0 months | 12 years and 8 months | 12 years and 5 months | 12 years and 1 months | 11 years and 10 months |

Redemption 6.5% | 14 years and 10 months | 14 years and 4 months | 13 years and 11 months | 13 years and 6 months | 13 years and 2 months | 12 years and 10 months | 12 years and 6 months | 12 years and 2 months | 11 years and 11 months | 11 years and 8 months | 11 years and 5 months | 11 years and 2 months |

Repayment 7% | 13 years and 9 months | 13 years and 5 months | 13 years and 0 months | 12 years and 8 months | 12 years and 4 months | 12 years and 0 months | 11 years and 9 months | 11 years and 6 months | 11 years and 3 months | 11 years and 0 months | 10 years and 9 months | 10 years and 7 months |

Redemption 7.5% | 12 years and 11 months | 12 years and 6 months | 12 years and 2 months | 11 years and 11 months | 11 years and 7 months | 11 years and 4 months | 11 years and 1 months | 10 years and 10 months | 10 years and 8 months | 10 years and 5 months | 10 years and 3 months | 10 years and 1 months |

Redemption 8% | 12 years and 1 months | 11 years and 10 months | 11 years and 6 months | 11 years and 3 months | 11 years and 0 months | 10 years and 9 months | 10 years and 6 months | 10 years and 4 months | 10 years and 1 months | 9 years and 11 months | 9 years and 9 months | 9 years and 7 months |

## Calculate term of a loan by interest rate and repayment rate

## Formula to calculate the term of a loan:

the **Term of a loan** you calculate with the following **Formula**:

To calculate the table cell highlighted in yellow with 1 % repayment and 3.5 % interest, we get **Credit period n **following formula:

## Check installment amount and term with budget calculation

A budget calculation, which records all of the borrower's income and expenses, can be used to determine how much money the borrower has available each month to repay the loan. This amount is then used as the basis for the amount of the monthly installments. The higher the amount determined, the more the borrower can pay each month and the faster he or she can repay the loan. This in turn has a positive impact on the interest rate, as faster repayment of the loan usually results in a more favorable interest rate.

## The term of different types of credit

### Term of an installment loan

installment loans are generally concluded with maturities of **12 to 84 months** Some banks even offer repayment terms of up to 120 months. However, particularly long terms are found in civil servant loans, as the financial security provided by the comparatively secure income of civil servants enables longer repayments. In these cases, terms of up to 20 years are possible.

### Term of a real estate loan

However, an even longer term is only possible with construction financing The loan amounts are usually higher and the loan is secured by a land charge. A real estate loan has terms of **minimum of 5 and maximum of 35 to 40 years.** The real estate loan must be paid off within the acquisition period, i.e. before retirement. If the loan is to be paid off, the land charge can also be assigned. With a construction financing you should pay attention to a sustainable monthly rate and at the same time try to keep the cost of the loan as low as possible.

### Term mini loans

at Bagatell- and mini loans the terms are usually very short, typically between** 30 and 60 days.** This type of loan is usually for smaller purchases or unforeseen expenses and is therefore repaid in a shorter period of time. These loans usually have **higher interest rates** than regular consumer loans, as they are granted for a shorter period and on a smaller scale. However, due to the short term of the loans, interest is still hardly significant. However, with mini loans, you must make absolutely sure that you are able to repay the loan within the agreed term. Otherwise, there is a risk of reminder and late payment fees, which can be easily avoided with a little care.

## What are the credit terms in summary

**mini loan**: 30 to 60 days**installment loan**: 12-84 months**construction financing**: 5 to 35 years

In the case of mini loans, the credit period is limited to **30 - 60 days **lowest. Next come installment loans that have terms between **12 and 84 months** have. In exceptional cases, however, longer terms of up to 240 months are possible for installment loans (e.g., for a civil servant loan). Construction financing has the longest credit period due to its amount. Most banks offer construction financing with terms of **5 to 35 years **an. Some banks even offer younger borrowers construction financing with a term of 40 years. However, such long terms are often only offered if the loan can be repaid by retirement age. Thus, one should be a maximum of 27 years old for a 40-year construction financing.

## Influence of the repayment period on the credit conditions

The runtime, has a direct influence on the **Interest rate of the loan**. As a rule, the longer the term, the higher the interest rate, since the risk increases for the lending institution that the borrower will not be able to meet his obligations.

The customer's liquidity, i.e. his financial situation, also plays an important role in determining the term. This is because people with a higher income and stable finances generally have a greater opportunity to repay their liabilities in a shorter period of time. This in turn means a lower risk of default for the bank, which translates into more favorable interest rates.

As a borrower, you should carefully analyze your income and expenses to determine the ideal term for a loan. A loan calculator can help you to determine your monthly financial capacity and to compare different terms.

Generally means a **longer term more favorable monthly installments**, but **Higher interest rates overall and thus increased total costs** for the borrower.

## What should be the maximum duration of the loan?

The maximum loan term is determined by your age, because you should start with **55 to 60 years debt-free** be. Only if you are already debt-free before you retire will there still be enough time to save something for that retirement. Therefore, you should choose the loan term in such a way that you are already debt-free a few years before retirement and do not have any Credit for pensioners you will need later.

## How long does it take to pay off 200,000 euros?

Depending on the interest rate and repayment rate, it takes approximately between 10 and 30 years to pay off 200,000 euros. With a effective annual interest rate of 3.5 % and an initial amortization rate of 6 %, it takes** 13 years and 4 months to pay off 200,000 euros**. This results in a monthly rate of** 1583,33 Euro**. Lower or higher repayment and interest rates result in different durations for the repayment, which you can find in the table for the repayment period above.

## How long does one pay off 400,000 euros?

Depending on the interest rate and repayment rate, it takes approximately between 10 and 30 years to pay off 400,000 euros. With an effective Annual interest rate of 3.5 % and an initial amortization rate of 2.5 %, it takes** 25 years and 5 months to pay off 400,000 euros**. This results in a monthly rate of** 2000,00 Euro**. Lower or higher repayment and interest rates result in different durations for the repayment, which you can find in the table for the repayment period above.

## How much do you pay for 500,000 credit?

With a term of 22 years and 5 months, an APR of 3.5 % and a repayment of 3%-redemption, the monthly installment for a 500,000 euro loan is 2,708.33 euros. In total, you pay over 22 years and 5 months thus 728,540.77 euros to the bank for the 500,000 euro loan. Unscheduled repayments reduce the term and total costs.

## How much credit can you get with €2,500 net?

With 2,500 € net you get a loan between 190,900 € and 275,000 €. Here, an interest rate of 3.5 % and a repayment of 2 % was assumed. With lower interest rates, the loan amount you can afford with your salary of €2,500 increases. To calculate the maximum possible loan amounts, 2 different approaches are chosen.

**For method 1**The maximum possible credit installment is determined, for which the following is a rough estimate **35 % of your net income** can be applied. Thus, with a net income of €2,500, you can earn a monthly loan installment of 875 €. If we now assume a repayment of 2 % and an interest rate of 3.5 %, this results in a maximum loan amount of € 190,900.

**For method 2 **is an alternative calculation method used by some banks to determine the maximum loan amount. Here, the **Monthly net multiplied by 110,** to obtain the maximum loan amount. At €2,500 net, this results in €275,000 loan amount. With a repayment of 2 % and an interest rate of 3.5 %, this results in a monthly loan installment of €1,260 in this case, which is almost half of the net income.

Method 1 | Method 2 | |
---|---|---|

Monthly income | 2.500 € | 2.500 € |

Credit installment | 875 € (=35 % of the monthly net) | 1260 € |

Maximum credit amount | 190.900 € | 275,000 € (=110 X monthly net ) |

## How much credit can you get with €3,000 net?

With 3,000 €net you get a loan between 229,100 € and 330,000 €. The loan amount is calculated using the methods presented in the previous section and is based on 2 % repayment and 3.5 % interest.

Method 1 | Method 2 | |

Monthly income | 3.000 € | 3.000 € |

Credit installment | 1.050 € (=35 % of the monthly net) | 1.513 € |

Maximum credit amount | 229.100 € | 330,000 € (=110 X monthly net ) |

## How much credit do you get at €4,000 net?

With 4,000 €net you get a loan between 305,500 € and 440,000 €. The loan amount is calculated using the methods presented in the previous section and is based on 2 % repayment and 3.5 % interest.

Method 1 | Method 2 | |

Monthly income | 4.000 € | 4.000 € |

Credit installment | 1.400 € (=35 % of the monthly net) | 2.017 € |

Maximum credit amount | 305.500 € | 440,000 € (=110 X monthly net ) |