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Resource Mobilization — Entrepreneurship STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEntrepreneurshipResource Mobilization3 Marks
Question
What is the difference between Term Loan and Demand Loan?
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Answer

Difference Between term loan and demand loans:
S.No.
Basis
Term Loans
Demand Loans
1.
Meaning
These loans are extended by the banks to their customers for fixed period.
These loans are provided by the banks against the security of Fixed Deposits Receipts (FDR), Government Securities, Life Insurance Policies, etc.
2.
Purpose
To purchase machinery, trucks, scooters, houses, etc.
 
3.
 
The borrower repays these back in monthly/ quarterly/ half yearly/ annual installments.
These loans are called demand loans because bank can demand them at anytime, by giving notice to the customer.

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