How does the loan term affect the APR?

Longer repayment periods generally mean more total interest paid over the life of the loan, resulting in a higher Annual Percentage Rate (APR) as costs are spread over more years. Shorter terms lead to lower APRs but higher monthly instalments.

With loans having upfront fees like processing charges, shorter terms concentrate these fees over fewer EMI payments, increasing the APR. Lenders also tend to charge higher interest rates for longer-term loans as they are seen as riskier, further raising the APR. Use an APR calculator to understand how changing the tenure would affect the APR interest.