2 min read
Definition
A term loan is a fixed sum advanced in one payment and repaid over an agreed period in scheduled instalments, usually with interest. The total cost is knowable on day one, and the balance only falls. It contrasts with revolving credit, which can be drawn and redrawn within a limit.
Term loans suit a single, defined need — a purchase, a project, a tax bill — where certainty and a fixed end date help. See term loan vs revolving facility and short vs long-term loan.
Related reading
Term loan vs revolving credit facility
A term loan hands over a lump sum you repay on a fixed schedule; a revolving credit facility is a reusable…
Read →
Revolving credit (defined)
Revolving credit is a reusable facility with an agreed limit you can draw, repay and redraw, paying interest…
Read →
Short-term vs long-term loan: which to pick
A short-term loan costs less overall but more per month; a long-term loan eases monthly pressure but costs…
Read →
A guide to business term loans
A business term loan provides a company with a fixed lump sum repaid over an agreed schedule, making it one…
Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.