Question : Which of the following is a feature of a term loan?
Option 1: Flexible repayment period
Option 2: Interest rate is fixed for the entire tenure
Option 3: High interest rate
Option 4: No collateral required
Answer (1)
25th Jan, 2024
Correct Answer: Interest rate is fixed for the entire tenure
Solution : The correct answer is (b). Interest rate is fixed for the entire tenure
A key feature of a term loan is that the interest rate is often fixed for the entire duration or tenure of the loan. This means that the borrower and lender agree upon a specific interest rate at the beginning of the loan, and it remains unchanged throughout the repayment period.
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