Term Loan

Term Loan

Term loans are short-term loans offered to businesses for capital expenditure and expansion among others .Term loans are short-term loans offered to businesses for capital expenditure and expansion among others

Term Loan
5 %
Interest Rate
Term Loan
7.73 %
Base Rate
Term Loan
12.73 %
Total Interest Rate

Last Updated Date: November 30, 2021

Himalayan Bank Ltd

With the vision to become a Leading Bank of the country by providing premium products and services to the customers, thus ensuring attractive and substantial returns to the stakeholders of the Himalayan Bank was established in 1993. The most recent rating of Himlayan Bank Limited by Bankers’ Almanac as country’s number 1 Bank easily confirms their claim and to become the Bank of first choice is the main objective of the Bank. The mission of this Bank is to become the preferred provider of quality financial services in the country. There are two components in the mission of the Bank; Preferred Provider and Quality Financial Services; therefore at HBL they believe that the mission will be accomplished only by satisfying these two important components with the Customer at focus. The Bank always strives positioning itself in the hearts and minds of the customers. Legacy of Himalayan Bank lives on in an institution that's known throughout Nepal for its innovative approaches to merchandising and customer service. Products such as Premium Savings Account, HBL Proprietary Card and Millionaire Deposit Scheme besides services such as ATMs and Tele-banking were first introduced by HBL. Other financial institutions in the country have been following HBL’s lead by introducing similar products and services.

Term Loan

REQUIRED DOCUMENTS

Documents Required for Term loan

  1. Loan Application Form.
  2. Identification document like Citizenship/Passport of applicant
  3. 2 Passport size Photograph of applicant
  4. Certified Income Statement
  5. Paper of Agreements/contracts (for Fixed Income Groups) of applicant
  6. Profile of Company and its Director(s) or Firm and its Partners / Proprietor.
  7. Copy of land ownership certificate, blue print of land, latest land revenue receipt
  8. Registration documents of the company / Firm (renewed, as applicable).
  9. Other related documents as per bank request.


What Is Term Loan ? 

Term loans are basically granted for starting a new business or expansion of existing business, purchase of land/plant, machinery for setting up factory etc. It is granted for mostly 1 year to 20 years. Term loans have a specified repayment terms with fixed instalment facilities. Interest is charged on the principal amount in this case. In case of term loan, mortgage of land, plant and machinery, building may be shown as the security to avail the loan. The borrower has to pay a penalty amount in case of repayment of their borrowed money before maturity term. A term loan is a loan from a bank for a specific amount that has a specified repayment schedule and either a fixed or floating interest rate. A term loan is often appropriate for an established small business with sound financial statements. Also, a term loan may require a substantial down payment to reduce the payment amounts and the total cost of the loan.

Who Can Apply For Term Loan ?

In corporate borrowing, a term loan is usually for equipment, real estate, or working capital paid off between one and 25 years. Often, a small business uses the cash from a term loan to purchase fixed assets, such as equipment or a new building for its production process. Some businesses borrow the cash they need to operate from month to month. Many banks have established term-loan programs specifically to help companies in this way. The term loan carries a fixed or variable interest rate based on monthly or quarterly repayment schedule, and a set maturity date. If the loan proceeds are used to finance the purchase of an asset, the useful life of that asset can impact the repayment schedule. The loan requires collateral and a rigorous approval process to reduce the risk of default or failure to make payments. However, term loans generally carry no penalties if they are paid off ahead of schedule.

Types of Term Loans

Term loans come in several varieties, usually reflecting the lifespan of the loan.

Short-term loan

A short-term loan usually offered to firms that don't qualify for a line of credit, generally runs less than a year, though it can also refer to a loan of up to 18 months or so.

Intermediate-term loan 

An intermediate-term loan generally runs more than one—but less than three—years and is paid in monthly installments from a company’s cash flow.

Long-term loan

A long-term loan runs for three to 25 years, uses company assets as collateral, and requires monthly or quarterly payments from profits or cash flow. The loan limits other financial commitments the company may take on, including other debts, dividends, or principals' salaries, and can require an amount of profit set aside for loan repayment.

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