Credit terms refer to the conditions under which credit is extended to a borrower. These terms typically include the interest rate, repayment schedule, and any fees associated with the loan. Understanding credit terms is essential for borrowers to manage their finances effectively and avoid potential pitfalls. In business transactions, credit terms can also specify the time frame for payment, such as net 30 or net 60, indicating that payment is due within 30 or 60 days, respectively. Clear credit terms help both lenders and borrowers establish expectations and maintain healthy financial relationships.