What Is a Term Loan?
A term loan is a type of loan that is repaid in regular installments over a set period. It is commonly used by businesses for capital expansion and by individuals for big expenses like education, home renovation, or high-ticket purchases.
Unlike credit cards or overdrafts, a term loan has:
A fixed tenure (e.g. 6 months to 5 years)
A fixed or variable interest rate
EMI-based repayment
Types of Term Loans
| Type | Description | Common Use Case |
|---|---|---|
| Short-Term Loan | Up to 1 year | Working capital, urgent expenses |
| Medium-Term Loan | 1 to 3 years | Equipment purchase, vendor payments |
| Long-Term Loan | More than 3 years | Business expansion, large projects |
Term loans can be secured (with collateral) or unsecured (based on income/creditworthiness).
Features of a Term Loan
Predefined Loan Amount – Based on eligibility
Fixed Tenure – Generally 1 to 5 years
Monthly EMIs – Predictable repayment schedule
Interest Rate – Fixed or floating
Tax Benefits – In some cases (business loans)
Benefits of Term Loans with Vizzve Finance
✔️ Quick disbursal – as fast as 30 minutes
✔️ Transparent processing – no hidden charges
✔️ Flexible repayment – choose your tenure
✔️ Collateral-free options available
✔️ Suitable for salaried, self-employed & businesses
Who Should Consider a Term Loan?
Small businesses looking to scale
Professionals needing working capital
Individuals with planned large expenses
Startups looking for structured repayment
FAQs
Q1. What is the difference between a term loan and a personal loan?
A personal loan is a type of term loan, usually unsecured and for individual use. Term loans also include secured business loans with longer terms.
Q2. Can I prepay a term loan?
Yes, Vizzve allows part-payment or foreclosure with minimal or no charges depending on the loan terms.
Q3. Will my credit score affect my term loan approval?
Yes. A higher CIBIL score (700+) increases approval chances and may help get a better interest rate.
Published on : 24th July
Published by : SMITA
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