Which loan is repaid over 10 years or more?

Which loan is repaid over 10 years or more?

• A. Short-Term Loan
• B. Hire Purchase
• C. Long-Term Loan
• D. Overdraft

Answer: (C)

Understanding how loans are categorized by how long you repay them helps with this question. A loan repaid over 10 years or more fits the long-term category, because the repayment period is many years, designed for larger purchases or investments and spreading the cost over a long horizon. This contrasts with short-term loans, which are paid back within a year, and overdrafts, which are flexible facilities not tied to a fixed long-term schedule. Hire purchase can involve multiple payments over several years too, but it’s tied to a specific asset and isn’t typically described as 10 years or more in GCSE contexts. So the option that best matches a 10-year-plus repayment period is the long-term loan.

Understanding how loans are categorized by how long you repay them helps with this question. A loan repaid over 10 years or more fits the long-term category, because the repayment period is many years, designed for larger purchases or investments and spreading the cost over a long horizon. This contrasts with short-term loans, which are paid back within a year, and overdrafts, which are flexible facilities not tied to a fixed long-term schedule. Hire purchase can involve multiple payments over several years too, but it’s tied to a specific asset and isn’t typically described as 10 years or more in GCSE contexts. So the option that best matches a 10-year-plus repayment period is the long-term loan.