This study established the effect of credit terms on loan portfolio performance in Butuuro people’s Sacco Nyakabirizi Main Branch, Bushenyi district, Uganda. The study used a cross sectional case study design which involved triangulation (use of multiple data collection techniques simultaneously) i.e., utilizing both quantitative and qualitative approaches. A representative sample of 218 respondents was selected from a population of 420 based on the Krejcie and Morgan 1970 table (Amin, 2005) for determining sample size for research activities. The findings revealed that credit terms had a positive correlation with the loan portfolio performance in commercial banks (r = 0.259** P< 0.01). This meant that the two variables are positively related. The study recommended improvement of staff and customer understanding on recovery of loans and its benefits. That loan scoring process is shortened. That credit department be properly resourced and facilitated to visit the client regularly.