Project Report For Term Loan
A term loan is a sum of money borrowed from a bank with a set repayment timetable and either a fixed or variable interest rate.
What Is Term Loan?
Term loan is another name for demand loan. A term loan is a loan obtained from an institution for a sum which must be returned in equated monthly instalments. The interest rate might be fixed or variable, depending on the borrower’s preference. A term loan could be used for a number of objectives, like business startup, working capital expenses, equipment purchases, and plant & machinery overhauls. The loan term might range from one to three to ten years. Term might well be prolonged up to 30 years on a case-by-case scenario. Additionally, shorter-term credit could be granted to businesses that require financing but just don’t qualified for longer-term credit. Term loans are available for greenfield and brownfield development projects.
Term Loan Details
Short Term Loans:
Short term loans are usually paid back in a year.
Loan for the Long Term:
Long term loans are those that may be returned over a period of time ranging from five to ten years. In some exceptional circumstances, the payback period might reach six years.
Term Loan Eligibility
The individual’s age must be at least 18 years old at the time of loan application and no more than 65 years old at the time of loan maturity.
Individual with a favourable repayment record and a strong credit score.
Individual must have an excellent credit score or CIBIL score, preferably greater than 700.
The individual must have a stable source of revenue.
No defaults with any finance company by the individual.
Documents Needed For Term Loan
- Business Plan that should be prepared by the owner.
- Completed application form accompanied by two passport-sized pictures.
- KYC Documentation For ID, Address Verifications – Passport, PAN card, Aadhar card, voter identification card, driving licence, utility bills (electricity, telephone, or water), and so on.
- Evidence of a business establishment.
- Bank statement over the last 12 months.
Minimum transaction volume required by the bank or lender.
- Any further documentation that the bank or lender need.