A term loan is a lump sum borrowed from a lender and repaid through regular recurring payments over a predetermined period of time. Interest rates for term loans may be fixed or variable. One example of a term loan is an auto loan, wherein you pay a fixed monthly payment until the loan is repaid.
Some loans are fully amortized, meaning that at the end of the repayment term the entire amount borrowed, plus the accrued interest, is paid in full.
