Types
Loan agreements are usually characterised either of two different ways: by the type of lender, or by the type of facility.
Categorising loan agreements by lender usually simply sub-divides loans into:
- bilateral loans
- syndicated loans
Categorising loan agreements by type of facility, usually results in two primary categories:
- term loans, which are repaid in set instalments over the term, or
- revolving loans (or overdrafts) where up to a maximum amount can be withdrawn at any time, and interest is paid from month to month on the drawn amount.
Within these two categories though, there are various subdivisions such as interest-only loans, and balloon payment loans. It is also possible to subcategorise on whether the loan is a secured loan or an unsecured loan, and whether the rate of interest is fixed or floating.
Read more about this topic: Loan Agreement
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