Flexible Term Loan Options
Term loans are structured financing options provided to businesses or individuals for a fixed tenure, available as short-term loans for immediate needs or long-term loans for major investments and growth.
Types of Term Loan
Term loans are categorized based on the tenure, purpose, and repayment structure
Short-Term Loan
Offered for a period of up to 1–3 years, ideal for working capital and urgent cash needs.
Long-Term Loan
Extended for 5–15 years, generally used for expansion, equipment purchase, or infrastructure investment.
Secured Term Loan
Backed by collateral like property, machinery, or assets, usually offering lower interest rates.
Unsecured Term Loan
No collateral required, but typically comes with higher interest rates and shorter tenure.
Fixed Rate Term Loan
Interest remains constant throughout the loan tenure, ensuring predictable repayments.
Floating Rate Term Loan
Interest rates fluctuate based on market conditions, offering potential cost savings.
Why Term Loans are Important?
Business Growth Support
Helps fund expansion, acquisitions, or modernization.
Liquidity Management
Ensures smooth cash flow for operational needs.
Structured Repayment
Fixed EMIs make financial planning easier.
Flexibility in Tenure
Borrowers can choose between short or long durations depending on requirements.
FAQs
What is the difference between short-term and long-term term loans?
Short-term loans are for immediate needs (1–3 years), while long-term loans extend up to 15 years for larger investments.
Can individuals also apply for term loans?
Yes, both individuals and businesses can avail term loans depending on eligibility.
What documents are required for a term loan?
Typically, ID proof, financial statements, income proof, and collateral documents (if applicable) are needed.
Are prepayment options available on term loans?
Yes, most lenders allow prepayment or foreclosure, though some may charge a nominal fee.