DEFINITION of 'Evergreen Loan'

A loan that does not require the principal amount to be paid off within a specified period of time. Evergreen loans are usually in the form of a short-term line of credit that is routinely renewed leaving the principal remaining outstanding for the long term.

Also called a "standing" or "revolving loan".

BREAKING DOWN 'Evergreen Loan'

Credit cards and checking account overdraft lines of credit are widely-used as evergreen or revolving loans. Evergreen loans are a useful type of personal credit because the user does not need to reapply for a new loan every time they need to use it.

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RELATED FAQS
  1. What are the differences between revolving credit and installment credit?

    Discover how to distinguish between installment credit loans and revolving credit loans, and learn how they affect your credit ... Read Answer >>
  2. What is an evergreen provision and how does it affect shareholders?

    It is common for publicly-traded corporations to provide more than just regular salary compensation to their management and ... Read Answer >>
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