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Soft Loan Explained

Soft Loan Explained

A soft loan is a loan with no interest or a  below-market interest rate (BMIR is a rate that is below the prevailing commercial bank interest rate in effect at a particular time).  Also called  “soft financing” or “concessional funding,” soft loans have relaxed terms, such as extended grace periods in which only interest or service charges are due, and interest holidays. Soft loans typically offer longer repayment (also known as amortization) schedules (in some cases up to 50 years)…

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