Definition: The period over which a loan is scheduled to be repaid.
In plain words
The loan term is how long you have to repay the loan, from when you get the money to the last scheduled payment.
Why it matters
A longer term usually means smaller payments but more total interest. A very short term can make a modest fee equal a very high APR. Many payday rules cap the term, for example at 62 days in several provinces.
Example
Illustrative example: A $1,000 loan at 30% a year, repaid monthly: over 12 months the payment is about $97 and total interest about $170. Over 24 months the payment is about $56 and total interest about $340.
Always read the term in the context of your own agreement and local law.