Long term loans
(noun)
Loans that are generally understood to be over a year in duration - often much longer.
Examples of Long term loans in the following topics:
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Long-Term Loans
- Three common examples of long term loans are government debt, mortgages, and debentures (bonds).
- Long term loans are generally over a year in duration and sometimes much longer.
- Three common examples of long term loans are government debt, mortgages, and bonds or debentures .
- Long term loans are generally over a year in duration and sometimes much longer.
- Outline the characteristics of three types of long term loans: debt, mortgages and bonds
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Short-Term Loans
- Short-term loans offer individuals and businesses borrowing options to meet financial obligations.
- The borrower receives cash from the lender more quickly than with medium- and long-term loans, and must repay it in a shorter time frame.
- A payday loan (also called a payday advance) is a small, short-term unsecured loan.
- The basic loan process involves a lender providing a short-term unsecured loan to be repaid at the borrower's next pay day.
- A bridge loan is a type of short-term loan, typically taken out for a period of two weeks to three years pending the arrangement of larger or longer-term financing.
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Non-Bank Financial Institutions
- But these short-term financial fixes can cost you big bucks because they are ostensibly high-cost loans.
- Consider your options to taking a high-cost loan and use loans wisely.
- A payday loan is a small, high-interest, short-term cash loan.
- Although a payday loan may be a convenient short-term solution, it is not a good idea for long-term cash needs.
- You run the risk of getting into a payday loan cycle of debt by taking out loan after loan
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Credit Operations
- Companies frequently offer credit to their customers as part of the terms of a purchase agreement.
- A line of credit may take several forms, such as overdraft protection, demand loan, special purpose, export packing credit, term loan, discounting, purchase of commercial bills, traditional revolving credit card account, etc.
- However, unlike a term loan, revolving debt allows the borrower to draw down, repa,y and re-draw credit amounts advanced to her by the available capital during the term of the debt.
- The loan is generally provided at a cost, referred to as interest on the debt, which provides an incentive for the lender to engage in the loan.
- Long-term interest rate statistics for non-Euro countries plus Greece, Portugal, and Ireland.
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Secured vs. Unsecured Funding
- A secured loan is a loan in which the borrower pledges an asset (e.g. a car or property) as collateral, while an unsecured loan is not secured by an asset.
- A mortgage loan is a secured loan in which the collateral is real estate.
- If the borrower does not pay back the mortgage within the agreed upon terms, the lender may seize the property.
- For the debtor, a secured debt may receive more favorable terms than that available for unsecured debt, or to be extended credit under circumstances when credit under terms of unsecured debt would not be extended at all.
- Unsecured loans are often more expensive and less flexible than secured loans, but suitable if the lender wants a short-term loan (one to five years).
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Debt Finance
- Debt is a way for firms to access capital for operations or investment with various terms and agreements for future repayment .
- A basic loan or "term loan" is the simplest form of debt.
- Such loans are also colloquially called "bullet loans", particularly if there is only a single payment at the end – the "bullet" – without a "stream" of interest payments during the "life" of the loan.
- A syndicated loan is a loan that is granted to companies that wish to borrow more money than any single lender is prepared to risk in a single loan, usually many millions of dollars.
- Bonds have a fixed lifetime, usually a number of years; with long-term bonds, lasting over thirty years, being less common.
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Alternate Sources of Funds
- Receipts for the sale of loans, debt, or equity instruments in a trading portfolio
- Other activities which impact long-term liabilities and equity of the company are also listed under financing activities, such as:
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Savings and Loan Associations (S&Ls)
- A savings and loan association (or S&L), also known as a thrift, is a financial institution that specializes in accepting savings deposits and making mortgage and other loans.
- The terms "S&L" or "thrift" are mainly used in the United States; similar institutions in the United Kingdom, Ireland, and some Commonwealth countries include building societies and trustee savings banks.
- S&Ls accepted savings deposits and used the money to make loans to home buyers.
- The savings and loan association became a strong force in the early twentieth century through assisting people with home ownership, through mortgage lending, and further assisting their members with basic saving and investing outlets, typically through passbook savings accounts and term certificates of deposit.
- Define a savings and loan association, and its role in the American banking system
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Liabilities
- Examples of long-term liabilities include long-term bonds, leases, pension obligations, and debentures.
- Examples of types of liabilities include money owing on a loan, money owing on a mortgage, or an IOU.
- They usually include payables such as wages, accounts, taxes, and accounts payables, unearned revenue when adjusting entries, portions of long-term bonds to be paid this year, short-term obligations (e.g., from purchase of equipment).
- Long-term liabilities: these liabilities are reasonably expected not to be liquidated within a year.
- They usually include issued long-term bonds, notes payables, long-term leases, pension obligations, and long-term product warranties.
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Commercial Banks
- Commercial banks engage in the following activities: the processing of payments; accepting money on term deposit; lending money by overdraft, installment loan, or other means; providing documentary and standby letters of credit guarantees, performance bonds, securities underwriting commitments and other forms of off- balance sheet exposures; and the safekeeping of documents and other items in safe deposit boxes.
- Commercial banks provide a number of loans.
- Commercial banks may also provide unsecured loans, which are monetary loans that are not secured against the borrower's assets (i.e., no collateral is involved).
- An overdraft is an example of an unsecured loan.
- If the positive balance exceeds the agreed terms, then additional fees may be charged and higher interest rates may apply.