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C TERM LOAN
What is a term loan in the context of bank credit?
A term loan is a credit facility sanctioned for a specific period, typically exceeding one year, for financing capital expenditure such as purchase of machinery, equipment, or construction of fixed assets.
What is the typical maximum repayment period for a long-term loan sanctioned by banks?
Long-term loans are repaid over periods exceeding seven years.
How are term loans classified based on their tenure?
Term loans are classified as short-term (up to 1 year), medium-term (1–5 years), and long-term (above 5 years) based on the repayment period.
What is a medium-term loan and what tenure does it generally cover?
Medium-term loans have repayment tenures ranging from three to seven years.
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