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A term loan is a loan that is repaid in installments over a set period. Term loans can be used for personal or business purposes. The interest rate for a term loan in Nepal depends on the bank and the type of loan. The interest rate is the cost of borrowing money, expressed as a percentage.
How does a Term Loan work?
- The borrower receives a lump sum of money
- The borrower agrees to repay the loan in regular installments over a set period
- The borrower pays interest on the loan, which is added to the amount that needs to be repaid
- The interest rate can be fixed or floating
Given below is the list of Bank/FI & respective interest rates that prevail at the present situation in Nepal
| BANK / FINANCIAL INSTITUTION | LOAN TYPE | RATE OF INTEREST | PROCESSING FEE | TENURE |
|---|---|---|---|---|
| Nepal Bank Limited | Industrial/Commercial | 6.21% – 9.46% | – | |
| Nepal Bank Limited | Real Estate-Business Complex | 6.21% – 8.96% | – | |
| Everest Bank Limited | Term Loan | 6.84% – 8.84% | 5 years | |
| Nabil Bank Limited | Term Loan-Hospitality | 7.06% – 9.06% | – | |
| Siddhartha Bank Limited | Industry/Trading-Term Loans | 7.13% – 10.63% | – | |
| Nepal SBI Bank Limited | Term Loan/Project Finance | 7.14% – 9.14% | – | |
| SCB | Term Loans | 7.19% – 9.19% | – | |
| Nabil Bank Limited | Term Loan-Corporate | 7.31% – 9.31% | – | |
| Prime Commercial Bank Limited | Term Loan | 7.37% – 12.37% | – | |
| Rastriya Banijya Bank Limited | Industrial/Commercial | 7.39% – 7.39% | – | |
| Citizens Bank International Limited | Term Loan | 7.55% – 10.55% | – | |
| Mahalaxmi Bikas Bank Limited | Term Loan | 7.72% – 11.47% | – | |
| Himalayan Bank Limited | Term Loan-Premier | 7.80% – 9.80% | – | |
| Jyoti Bikas Bank Limited | Term Loans | 7.82% – 12.82% | – | |
| Shangrila Development Bank Limited | Tourism Loan-Term | 7.90% – 11.89% | – | |
| Shangrila Development Bank Limited | Energy Loan-Term | 7.90% – 11.89% | – | |
| Shangrila Development Bank Limited | Term Loan | 7.90% – 11.89% | – | |
| Shangrila Development Bank Limited | Easy Term | 7.90% – 11.89% | – | |
| Nabil Bank Limited | Term Loan-SME | 8.06% – 10.06% | – | |
| Nepal Investment Mega Bank Limited | Term Loan | 8.08% – 10.08% | – | |
| Rastriya Banijya Bank Limited | Housing-Real estate | 8.14% – 8.39% | – | |
| Laxmi Sunrise Bank Limited | Term Loans | 8.34% – 10.84% | – | |
| Sanima Bank Limited | Bridge Gap Loan | 8.40% – 10.40% | – | |
| Sanima Bank Limited | Term Loan | 8.40% – 10.40% | – | |
| Green Development Bank Limited | Term Loan | 8.76% – 12.76% | – | |
| Sindhu Bikas Bank Limited | Real Estate | 8.82% – 13.82% | – | |
| Central Finance Limited | Real Estate Loan | 8.99% – 13.99% | – | |
| Garima Bikas Bank Limited | Real estate Loan | 9.02% – 11.02% | – | |
| ICFC Finance Limited | Term Loan | 9.02% – 13.02% | – | |
| Himalayan Bank Limited | Term Loan-Standard | 9.30% – 11.30% | 15 years | |
| Lumbini Bikas Bank Limited | Real Estate Loan-OD | 9.71% – 12.21% | – | |
| Lumbini Bikas Bank Limited | Real Estate Loan-DL | 9.71% – 12.21% | – | |
| Lumbini Bikas Bank Limited | Real Estate Loan-TL | 9.71% – 12.21% | – | |
| Prabhu Bank Limited | Bridge Gap Loan | 10.26%-12.26% | – |
When is the Term Loan used?
- Businesses may use term loans to purchase fixed assets like land, buildings, or machinery
- Businesses may also use term loans for long-term investments like business expansion or modernization
- Term loans may also be used for project financing
How long is the Term Loan?
- Term loans usually last between one and ten years, but may last as long as 30 years
- The length of the loan determines whether it is considered short-term, medium-term, or long-term
