What is a term loan?

A term loan is typically understood as a specific type of loan that is borrowed for a set period of time with a fixed repayment schedule. The correct answer reflects the broader category of loans that are not demand loans, which implies that term loans have a defined maturity date and are not subject to recall on short notice by the lender.

Term loans generally have a predetermined repayment schedule, which might include fixed monthly payments that encompass both principal and interest, making them different from demand loans that can be called by lenders at any time. While the correct choice indicates that a term loan could encompass various types of loans beyond just demand loans, it also highlights the essential characteristic of having a defined repayment plan.

The other choices, such as those describing loans that are either required to be paid back on demand, offered for a short duration, or have flexible repayment schedules, do not appropriately capture the nature of a term loan, which is primarily defined by its fixed terms and structured repayment schedule.