The loan term is three years, and users need to repay it once a year. This is because the loan contract stipulates that users need to repay once a year. The repayment method of the user shall be subject to the agreement in the contract. Generally speaking, the loan needs to be repaid every month, but the two sides of the loan have special agreements, such as once a year, so the user can repay it once a year. The loan term is three years, and it is only repaid once a year, which requires users to have strong repayment ability, otherwise users had better choose to repay on a monthly basis to share the monthly repayment pressure.

Many banks have launched related products that do not repay the principal. As long as the interest is paid back normally, they can borrow a sum of money from the bank to repay the last loan. No matter which bank you are in, if you want to apply for a loan renewal without repayment of the principal, the prerequisite is that the borrower's business situation is relatively stable, so that even if the loan renewal is not approved without repayment of the principal, you can still return the money to the bank. The background of the birth of this kind of loan product is that the country solves the problem of financing difficulty and expensive financing for small and micro enterprises. In the past, small and micro enterprises needed to borrow funds to cross the bridge before the loan expired, and the borrowing cost was high. Now with this product, it has not only cracked down on private usury, but also reduced the financing cost of small and micro enterprises. Not all banks have this product of renewing loans without repaying the principal. When they meet a bank without this product, they can only find their own money.

Banks require to return the principal every year to prevent the risk of short-term loans and long-term use from the perspective of risk. The statements of small and micro enterprises are not very formal. I have seen many small and micro enterprises, and they will regard bank loans as long-term liabilities. As far as I know, banks will not issue loans to small and micro enterprises for more than 1 year, and when determining the standards of short-term liabilities and long-term liabilities, loans below 1 year are basically short-term liabilities.

Small and micro enterprises will find it convenient to renew their loans every year, so they regard the annual loans as funds that can be used for a long time. Originally, the bank granted you a working capital turnover, but you used it to buy fixed assets. This money will not be paid back for a while. This kind of short-term loan is often regarded as a risky behavior by banks. The reason why banks let borrowers repay the principal once a year is mainly to put the initiative in the hands of banks.