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 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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    Learn to differentiate between lines of credit and standard loans, and determine when you are likely to use each method of ... Read Answer >>
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