Reading your loan term comparison
The core tradeoff between term length and cost
Every year you add to a loan term lowers the monthly payment but adds interest, since you're paying that same rate for longer. On a $28,000 loan at 6.99% APR, going from a 10-year to a 25-year term nearly triples the total interest paid, from about $10,995 to $31,316, while the monthly payment drops from $325 to $198. Neither term is wrong, they just serve different budgets. The CFPB's explainer on how loan amortization works covers the underlying mechanics behind this tradeoff.
Why 20 and 25-year terms are so common in solar
Solar loans are often structured to keep the monthly payment close to or below the expected monthly bill savings, which usually means stretching the term to 20 or 25 years. That keeps the loan close to cash-flow neutral from day one, even though it costs more in total interest than a shorter term would. Check your own savings estimate against the payment in the monthly payment vs bill savings comparison. The solar payback period calculator can help you see how term length affects your overall payback timeline too.
How APR interacts with term length
A lower APR shrinks the gap between short and long terms, since less of each payment goes toward interest either way. At a very low APR, the difference in total cost between a 10-year and 25-year term is fairly small, but at a higher APR that gap widens fast. Run the loan APR impact calculator to isolate exactly how much rate alone changes your numbers. Borrow less by claiming first. The rebate stacking tool in our Rebates & Incentives section estimates the federal credit and rebates so you can size the loan to the net cost.
What happens if you pick a long term but pay it off early
Choosing a longer term for a lower required payment, then making extra payments when you can, gives you flexibility that a fixed short term doesn't. Check whether your loan has a prepayment penalty first using the prepayment penalty cost calculator, and see how much an early payoff would actually save with the early payoff savings calculator.
Seeing the full amortization behind any single term
This tool compares terms side by side at a summary level. If you want to see the month-by-month principal and interest breakdown for one specific term, the amortization schedule generator lays out every payment across the life of the loan. The CFPB's issue spotlight on solar financing covers general financing considerations worth reviewing before picking a term.