Term Loan
Fixed-term loan repaid in regular installments over set period.
Formula
Monthly Repayment = Loan Amount ÷ Number of Months (+ interest)
Real World
A local bakery takes a £50,000 term loan over five years from Barclays to buy commercial ovens, repaying a fixed monthly amount until the debt is cleared.
Exam Focus
Distinguish term loans from overdrafts in 'compare' questions — term loans are fixed-schedule, overdrafts are flexible and short-term.
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