Compare the two options
1-Year Term
- Lowest total interest cost
- Fastest way to become debt-free
- Simple, short commitment
- Highest monthly payment of the two
- Less flexibility if your budget changes
Best for: Smaller loan amounts with a larger available budget
3-Year Term
- Meaningfully lower monthly payment
- Easier to fit into a tight monthly budget
- More room to handle other expenses
- More total interest paid over the loan
- Takes three times as long to pay off
Best for: Larger loan amounts or tighter monthly budgets
Side-by-side table
| Feature | 1-Year Term | 3-Year Term |
|---|---|---|
| Term Length | 12 months | 36 months |
| Monthly Payment | Highest | Lower |
| Total Interest | Lowest | Higher |
| Good Fit For | Smaller amounts, larger budgets | Larger amounts, tighter budgets |
Choose based on the job
Choose 1-Year Term when
- You're borrowing a smaller amount
- Your budget can handle a higher payment
- You want to minimize total interest
- You want to be debt-free within a year
- You don't need ongoing payment flexibility
Choose 3-Year Term when
- You're borrowing a larger amount
- You need a lower, more manageable payment
- You'd rather spread the cost over more time
- You have other financial priorities this year
- You're comfortable paying more interest for lower payments