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Term loans explained: Types, benefits, and key drawbacks you should know


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  Term loans provide individuals with necessary funding for immediate capital needs, large purchases, or expansion. They offer quick access to funds with minimal documentation but require strict repayment adherence,

The article from MSN Money discusses term loans, which are a type of loan where a fixed amount is borrowed and repaid over a set period with interest. It outlines various types of term loans including short-term, intermediate-term, and long-term loans, each suited for different financial needs like managing cash flow, purchasing equipment, or funding long-term projects. The benefits highlighted include predictable repayment schedules, lower interest rates compared to credit cards, and the ability to finance large expenses or investments. However, key drawbacks include the potential for high monthly payments, the risk of collateral loss if the loan is secured, prepayment penalties, and the possibility of becoming over-leveraged. The article also emphasizes the importance of understanding the terms, interest rates, and one's repayment capacity before committing to a term loan.

Read the Full Mint Article at:
[ https://www.msn.com/en-in/money/news/term-loans-explained-types-benefits-and-key-drawbacks-you-should-know/ar-AA1AFsTO ]

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