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    Question

    Which of the following is not true about Term Loans?

    A The loan has to be repaid within the fixed term regardless of the firm’s financial situation. Correct Answer Incorrect Answer
    B The term loan’s maturity lies between 5 -10 years. Correct Answer Incorrect Answer
    C Term loans are Unsecured Loans. Correct Answer Incorrect Answer
    D The repayment of the loan is made in instalments Correct Answer Incorrect Answer
    E All are correct Correct Answer Incorrect Answer

    Solution

    Term loans are secured loans. The asset that is purchased using the term loan amount, will serve as a primary security and other assets of the company might be serving as collateral security.

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