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The first time you browse a crowdfunding platform, every loan can look more or less the same, a name, an interest rate, a term. Once you know what to look for, those details start to tell a much richer story. Here is the basic vocabulary you’ll need.

What You'll Learn

  • How loan type can affect risk and repayment.
  • Why term length matters.
  • Why yield should be read together with risk.

Loan categories by borrower type

Across the industry, you’ll typically see three categories:

  • Business loans, lending to companies for working capital, expansion, or refinancing. This is Afranga’s focus. Investors fund loans directly to vetted businesses.
  • Consumer loans, lending to individuals for personal use. Offered on some other platforms; not part of Afranga’s model.
  • Real estate loans, property-backed lending, often to fund renovation or development.

Each category has a different risk profile, regulatory framework, and recovery process. Afranga concentrates on business and real estate loans because these models offer clear legal liability and direct borrower transparency.

Short-term and long-term loans behave differently

Loan duration is usually measured in months. Short-term loans (a few months up to about a year) return your money sooner but typically offer lower total interest. Longer-term loans (one to several years) may pay a higher rate, but your money is committed for longer, and the chance of something changing in the borrower’s situation increases the further out you go.

Neither is “better.” A shorter loan is more flexible. A longer loan locks in a rate. What matters is matching the term to your own situation, money you’ll need in six months should not be tied up in a 36-month loan.

Higher-yield vs. lower-yield

Interest rates are not random. A higher rate reflects something specific about the loan: a riskier borrower profile, a longer term, less collateral, or a more demanding repayment structure.

A loan paying 12% p.a. is not “better” than one paying 8%, it is priced for more risk. The extra return is the borrower’s compensation to you for taking that risk. Whether the extra yield is worth the extra risk depends on your goals and how the loan fits the rest of your portfolio.

A useful habit: when you see a high yield, ask why, not whether to grab it.

How to read a loan listing

When you browse loans on Afranga, every listing shows the interest rate, term length, repayment structure, key borrower details, and links to the full KIIS. 

On Afranga, loans are either a business or real estate loan. Within that category, you’ll see variation in terms and structure, and we explain the specifics of each in the KIIS.

Key Takeaways

  • Crowdfunding loans vary by borrower type, duration, repayment structure, and yield.
  • Short-term loans return money sooner; long-term loans lock in a rate but increase exposure to change
  • A higher interest rate almost always reflects higher risk, not a better deal.

Quick Quiz

Question 1

What type of crowdfunding does Afranga offer?

A.  Real estate loans

B.  Business loans

C.  All of the above

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Question 2

Does a higher yield automatically mean a better investment?

A.  Yes

B.  No

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Question 3

A loan paying 12% p.a. compared to one paying 8% p.a. is typically

A.  A better deal

B.  Priced for more risk or longer term

C. A guaranteed higher return

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