Question

Which of the following features best describes a Term Loan as compared to a Cash Credit facility?

Q: Answer-Which of the following features best describes a Term Loan as compared to a Cash Credit facility?

Term loans are long-term financing options typically provided for purchasing fixed assets or financing long-term capital needs, repayable in installments. In contrast, Cash Credit is a short-term facility used to finance working capital and is typically repayable on demand or renewed annually.

A Term loans are primarily used for short-term needs, while Cash Credit is used for long-term financing.

B Term loans are repayable in installments over a longer period (5-10 years), while Cash Credit is repayable on demand.

C Term loans are used exclusively for working capital, while Cash Credit is used for capital asset purchases.

D Term loans are usually not secured by collateral, whereas Cash Credit typically requires collateral.

E Term loans are provided for working capital and short-term needs, while Cash Credit is typically used for capital expenditures.

Practice Next

More Financial Management Questions

What is the general provision required for substandard assets, without considering ECGC guarantee cover and securities available?
The process of converting a private company into a public company by issuing shares to the public for the first time is called:
Which of the following statements is/are correct regarding National Stock Exchange (NSE) in India? 1) NSE was established in 1992. 2) NSE has a tra...
Match the following:
Which of the following is not a characteristic of preference shares?
What is the role of the Insurance Regulatory and Development Authority of India (IRDAI) in the insurance sector?
A company manufactures two products, P and Q. The overhead costs and related activity drivers are as follows: Activity usage by products: What is...
Managing risk in a bank means _______ A. not entering into any business where there appears to be risks B. implementing the appropriate policies and proced...
DigiLocker, launched under the Digital India Programme in 2015, has registered over 70.69 crore users and issued more than 850 crore documents as of March ...
The concept of "expectancy theory" in motivation, as proposed by Victor Vroom, posits that an individual's motivation is determined by three key factors: e...

Hey! Ask a query

🎓

Think You're Ready for RBI Grade B?

RBI Grade B 2026 Phase 1 Memory Based Paper

200 Questions with Detailed Solutions
Section-wise Coverage (GA, English, Quant & Reasoning)

Download Now 100% Free PDF

Which of the following features best describes a Term Loan as compared to a Cash Credit facility?

Detailed Solution

More Financial Management Questions

Hey! Ask a query

Please Register/Login

RBI Grade B 2026 Phase 1 Memory Based Paper