Terms

The length of the loan term can vary and can range from as little as one month or as much as 30 years, depending on the loan program and rate selected. In general, loan terms can be broken down into three categories, short, intermediate and long term. Short (less than 18 months), intermediate (18 months to 10 years) or long term loan repayments (up to 30 years in special cases).

Good financial management dictates that loan terms correspond to the life of the operation or asset being financed. For example, seed, fertilizer and other agricultural operating expenses are “used up” with the crop being grown. Loans for this purpose should be paid when the crop is sold.

On the other hand, loans for items that have a very long life, farm real estate, for example, are suited to longer terms, up to 30 years in some cases.