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I am an attorney with 30 years of experience; I hope to provide you information that will help you in resolving your question.
In regard to a personal loan the best terms for the brrower are "simple interest" and "no pre-payment penalty." These are the terms you want in your agreement in regard to the interest.
As to your direct question, on a simple interest loan you only pay the interest on the mony while you have it. So if you hold the loan for one year you pay that years interest. Of course since interest is calculated on a percentage basis, the earlier payments are comprised more of interest than of principle.
Please note that under federal law the lender must provide you a truth in lending statement prior to you signing for the loan. The truth in lending statement with specify the amount of interest you will pay.
In regard to pre-payment penalties, this is not a good term for you because it requires you to pay a specified amount if you pay the loan early. So make sure you have no pre-payment penalty.
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