The loan term refers to the period from the time when the lender issues the loan to the borrower to the time when the loan is recovered. The loan term is the term for the borrower to actually use the loan.
First, the lender can arrange the loan scientifically and reasonably according to the length of the loan period to ensure the safety and efficiency of the credit assets.
Second, the borrower can apply for a loan according to the loan term, make good use of the loan within the term, and strive to get the maximum benefit.
Third, the loan term is closely related to interest payment, which can make the borrower calculate the borrowing cost more carefully and reduce unnecessary time. It can also enable the lender to allocate the loan amount reasonably and improve the overall benefit of loan use.
Extended data:
According to the length of the loan period, loans can be divided into short-term loans and medium-and long-term loans.
1, short-term loans with a term of 1 year or 1 year (temporary loans for more than 3 months and less than 6 months) are characterized by short term, low risk and high interest rate. They are usually issued in the form of "borrowing" and are mainly used to meet the needs of borrowers for short-term funds.
2. Medium-term loans with a term of over 1 year (excluding 1 year) and less than five years (including five years) are characterized by long term, high interest rate, poor liquidity and high risk.
3. Long-term loans are loans for more than 5 years (excluding 5 years).
People's Daily Online-China Banking Regulatory Commission: Set the loan term reasonably to reduce the repayment pressure.
Reference source: People's Daily Online-The longer the loan term, the better? Don't let the mortgage bind your life.
Reference source: Baidu Encyclopedia-loan term