Repayment

**Repayment** is the act of paying back a debt, usually in installments. The amount of each installment is called a **payment**. The term can also refer to the process of paying back a loan, in which case the loan is repaid in full at the end of the term.

**Repayment terms** specify the amount of each payment, the frequency of payments, and the date on which the final payment is due. Repayment terms are important because they determine how much money you will pay in interest over the life of the loan.

**There are two main types of repayment terms:**

* **Fixed-rate loans** have a fixed interest rate that remains the same throughout the life of the loan. This means that your monthly payments will be the same each month.
* **Variable-rate loans** have an interest rate that changes over time. This means that your monthly payments may increase or decrease depending on the current interest rate.

**When you take out a loan, you will need to decide which repayment term is right for you.** If you are confident that you will be able to make the same monthly payment each month, then a fixed-rate loan may be a good option. However, if you are not sure how your finances will change in the future, then a variable-rate loan may be a better choice.

**It is important to understand the terms of your loan before you sign it.** Make sure you know how much you will be paying each month, how long you will be making payments, and when the final payment is due. By understanding the repayment terms of your loan, you can make sure that you are able to afford the payments and that you will be able to repay the loan in full.

**Repayment is an important part of financial planning.** By making sure that you are able to repay your debts, you can improve your credit score and build your financial security.