Loan agreements can be categorized by the type of loan facility or by the type of lender. When loans are categorized by lender, they are called either bilateral loans or syndicated loans. When loans are categorized by type of facility, the two primary types are term loans and revolving loans.
Term loans are loan agreements with set repayments in instalments over a fixed term while revolving loans are those loans which are also called overdrafts, permitting withdrawals of money anytime up to a maximum allowable amount where interest has to be charged on the amount drawn and paid monthly.