What Is a Term Loan?
Planning a big purchase or business expansion, but worried about arranging funds? A term loan is one of the most common and trusted ways banks help individuals and businesses meet planned financial needs without stress. What is Term Loan? A term loan is a loan given by a bank or financial institution for a fixed period of time. The borrower receives a specific amount and repays it in regular installments over an agreed duration. These installments usually include both the loan amount and interest. Term loans are widely used because they offer clarity—you know how much you need to pay and for how long. Types of Term Loans Banks usually offer different types of term loans based on duration: Short-term loans: Used for immediate or short-term needs, usually repaid within a year. Medium-term loans: Suitable for equipment purchase or business growth, repaid over a few years Long-term loans: Used for large investments like property or major expansion, repaid over many years. Key Featu...