What is a term loan?

What is a term loan?

A term loan or borrowing is a loan whose capital will be repaid in full at maturity. The interest can be paid in several instalments or at maturity.

For example, in the context of a real estate crowdfunding operation: the investor lends €1,000 at 10% per year for 24 months, so the developer must pay:

- 100 € at the end of the 1st year (i.e. the interest of 10%*1000 € of capital over 12 months)
- 1100 € at the end of the 2nd year (1000 € capital + 100 € interest, 10%*1000 € capital over 12 months)

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- What is a bond?
- What is an amortizable loan?
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Updated on: 05/04/2022