Glossary
Loan term
How long the loan runs: the period over which you agree to repay it. Car loans in NZ commonly run from one to five years or more.
By Leverage Finance · Updated 17 July 2026
The term is the biggest lever on a loan after its pricing. A longer term spreads the balance over more payments, so each payment is smaller, but interest accrues for longer, so the total repaid is usually higher. A shorter term does the reverse: bigger payments, less total interest.
Refinancing lets you re-choose the term. The cleanest refinance matches the new term to the time you had left, so the finish line stays put and only the cost changes. Extending the term lowers the payment but should be a deliberate choice, made with the total cost in view, not a default.
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