Project Report For Term Loan

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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.