Term loan is given for a fixed duration of time and must be repaid in regular instalments
A term loan provides borrowers with a lump sum of cash upfront in exchange for specific borrowing terms. Term loans are normally meant for A form of loan that is paid off over an extended period of time greater than 3 years is termed as a long-term loan. In exchange for a specified amount of cash, the borrower agrees to a certain repayment schedule with a fixed or floating interest rate. As Examples like Car loans, home loans, and certain personal loans are examples of long-term loans.
Term Loan Advantages
Simple, Streamlined Application Process.
Lower interest rates.
Allows operational cash flow to be used elsewhere.
Fast Approval; Preserves Shareholder Equity
Borrowers agree to pay their lenders a fixed amount over a certain repayment schedule with either a fixed or floating interest rate
Short and intermediate-term loans may require balloon payments while long-term facilities come with fixed payments.
