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Term loans
What is a term loan in banking?
A term loan is a credit facility extended for a fixed period exceeding one year, repaid in installments from the borrower's cash flows or earnings, used primarily for capital expenditure or long-term business needs.
What is the minimum repayment period that typically qualifies a loan as a term loan?
Loans repaid over more than one year are term loans.
How are term loans classified based on tenor?
Term loans are classified as short-term (up to 3 years), medium-term (3 to 7 years), and long-term (above 7 years), depending on the repayment period agreed between the bank and the borrower.
What is a medium-term loan and what is its typical tenor range?
Tenor between three to seven years qualifies as medium-term loan.
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