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Term Loan
What is a term loan?
A term loan is a credit facility extended for a fixed period, typically more than one year, repaid in installments from the cash flows generated by the funded asset or business activity.
What is the typical repayment period for a medium-term loan?
Medium-term loans have repayment periods of 3 to 7 years.
How are term loans classified based on maturity?
Term loans are classified as short-term (up to 1 year), medium-term (1–5 years), and long-term (5–10 years or beyond), depending on the repayment schedule.
What is the minimum DSCR generally acceptable to banks for term loan sanction?
Banks generally require a minimum DSCR of 1.25 to 1.5.
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