Term Loan

A term loan is a type of loan that provides a lump sum of money to the borrower, which is repaid over a predetermined period in regular installments. With varying features, there are various types of loan terms that serve your specific financial needs. However, when you need quick access to a loan, Buddy Loan provides you with the help you are searching for. Not just that, Buddy loan provides access to a seamless loan availing process for an amount of up to ₹15 Lakhs at a term loan interest rate of 11.99% p.a.

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Types of Term Loans

Term loans are structured with diverse terms and purposes. Here are types of term loan that offer individuals and businesses financing help for different aspirations and requirements.

Short-Term Loans: A short-term loan is a type of borrowing that provides a smaller sum of money to be repaid over a brief period, typically within a year or even a few months. These loans cover immediate financial needs, such as handling unexpected expenses, managing cash flow gaps for businesses, or addressing urgent personal matters.

Long-Term Loans: Designed for more extended periods, often over the years, these loans are suitable for significant investments like real estate purchases, business acquisitions, or substantial capital expenditures.

Intermediate-Term Loans: Typically repaid within three to seven years, these loans are commonly used for larger purchases such as equipment, machinery, or vehicle financing. They offer a balance between short-term and long-term financing needs.

Personal Term Loans: Individuals can also get term loans for personal needs such as home improvements, education expenses, or major purchases, often with fixed interest rates and defined repayment periods.

Eligibility Factors for term loans

To be eligible for applying for a loan term, the applicant must meet certain criteria. Meeting these eligibility criteria mentioned below shows a borrower's capability to manage and repay the loan, ensuring a higher chance of approval for a term loan application.

Nationality - Indian

Age: Applicants must be at least 18 years old and not over 65 years old.

CIBIL Score: A minimum CIBIL score of 750 or above is required.

Repayment History: A positive repayment history and a creditworthy profile are essential for approval.

Stable Income Source: ₹15,000 per month.

Employment: Categories include salaried individuals, public/private sector employees, government workers, and self-employed/non-professionals.

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Documents Required for Term Loans

When applying for term loans, several documents are typically required to complete the application process. These documents serve as proof of identity, address, income, and other essential details necessary for lenders to assess the borrower's eligibility and creditworthiness.

Proof of Identity: Valid government-issued identification such as a passport, driver's license, or Aadhaar card.

Proof of Address: Documents like utility bills, rental agreement, or bank statements that confirm your residential address.

Income Proof: Salary slips, bank statements, or income tax returns (ITR) for the self-employed, validating your regular income source.

Employment Proof: Employment certificate or business ownership documents for self-employed individuals.

Bank Statements: Typically, the latest 3-6 months' bank statements to showcase financial stability and transaction history.

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Benefits of Term Loan

These benefits make term loans a versatile and beneficial financing option for individuals and businesses seeking funds for specific while maintaining financial stability and flexibility.

Access to Funds: Term loans provide borrowers with a lump sum of money upfront, offering immediate access to capital for various purposes like business expansion, equipment purchase, or personal investments.

Flexible Repayment: They come with fixed repayment schedules, allowing borrowers to plan their budgets and manage finances efficiently by making regular installments over a specified period.

Interest Rates: Depending on the lender and terms, term loans may offer fixed or competitive interest rates, ensuring stability and potentially reducing overall borrowing costs.

Potential Tax Benefits: In some cases, the interest paid on term loans for specific (such as business investments) might be tax deductible, offering potential tax advantages to borrowers.

Opportunity to Build Credit: Timely repayments on term loans can positively impact credit scores, establishing an excellent credit history or improving the creditworthiness of individuals or businesses.

Serves Specific Needs: Term loans can be customized to suit various needs, such as personal loan term or long-term business loans for larger investments, providing flexibility to borrowers.

Support for Business Growth: For businesses, term loans can support growth initiatives by providing the capital for expansion, equipment upgrades, inventory purchases, or other strategic investments.

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How to apply a term loan

Here are the quick steps to avail your desired term loan with Buddy loan :

Step 1: - Visit buddyloan.com or download the Buddy Loan app (Android or iOS).

Step 2: Open the personal loan application page. Provide the mobile number and enter the received OTP.

Step 3: Specify loan amount, and personal email, and select Personal Loan or Business loan.

Step 4: Choose the employment type and the salary mode.

Step 5: Enter your work details and personal details.

Step 6: Enter communication address, income details, and click 'Submit’.

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Frequently Asked Questions

A term loan is a type of borrowing where a lender provides a fixed sum of money to a borrower. This amount is repaid over a specified period in regular installments, commonly used for specific like business expansion or major purchases.

Term loans come in different types: standard ones with fixed repayments, mid-term loans for specific needs, and specialized options like equipment loans for particular purchases.

Features such as loan amount, interest rates (fixed or variable), repayment period, collateral requirements, fees, and specific terms can vary significantly among different term loans offered by lenders.

Typical eligibility criteria include age (usually 18-21 years), good credit score (often 750 or higher), stable income, acceptable debt-to-income ratio, and sometimes collateral or guarantor depending on the loan type and amount.

Common documents needed include proof of identity, address, income proof, employment proof, credit history, etc.

Monthly installments are calculated using the loan amount, interest rate, and term length. This calculation factors in the type of interest (fixed or variable) and the total number of payments over the loan duration.

Benefits include immediate access to funds for specific needs, structured repayment schedules, aiding financial planning, fixed interest rates, potential tax benefits, and the opportunity to build credit through consistent repayments.

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