soft loan

(general) A loan made with easy or generous terms such as low or no interest and long payback.
(banking) This term refers to the no-interest loans granted to developing countries by the International Development Association. Such a “soft loan” carries no interest (although there is a small annual service charge), is payable in 50 years, and has an amortization rate of 1% repayable annually for the 10 years following an initial 10-year grace period, followed by 3% repayable annually for the remaining 30 years.

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