1. Loan Amount: The loan amount is the total sum borrowed from a lender. This amount is typically specified in the loan agreement and is based on factors such as the borrower’s creditworthiness, income, and the purpose of the loan.

2. Interest Rate: Term loans may have a fixed or variable interest rate. A fixed-rate term loan maintains a constant interest rate throughout the repayment period, providing predictability for borrowers. On the other hand, variable-rate term loans have interest rates that may change based on market conditions.

3. Loan Term: The loan term is the period over which the borrower agrees to repay the loan. Common loan terms for personal term loans can range from a few months to several years. Business term loans may have longer terms, especially for financing capital expenditures.

4. Repayment Schedule: Borrowers make regular payments (usually monthly) to repay the principal amount and interest. The repayment schedule is established at the outset of the loan and is outlined in the loan agreement.

5. Amortization: Term loans often involve amortization, which means that each payment includes both principal and interest. Over time, the proportion of the payment allocated to interest decreases, while the portion applied to the principal increases.

6. Security or Collateral: Depending on the type of term loan and the borrower’s creditworthiness, the loan may be secured or unsecured. Secured loans require collateral, which the lender can claim if the borrower defaults. Common types of collateral include real estate, vehicles, or other valuable assets.

7. Purpose: Term loans can serve various purposes, such as financing a home purchase (mortgage), buying a car, funding a business expansion, or covering other significant expenses.

8. Prepayment: Some term loans may allow borrowers to make additional payments or pay off the loan early without incurring penalties. This feature provides flexibility for borrowers who want to accelerate their repayment.

9. Origination Fees and Closing Costs: Lenders may charge origination fees or closing costs when issuing a term loan. These fees are typically included in the total loan amount or paid upfront.

It’s important for borrowers to carefully review the terms and conditions of a term loan, including interest rates, fees, and repayment schedules. Additionally, understanding the purpose of the loan and ensuring that the repayment plan aligns with one’s financial goals is crucial. For business term loans, companies may work with lenders to secure financing for various needs, such as equipment purchases, working capital, or expansion projects.