Another downside of Chinese loans is its short repayment period. Excluding the grace period, the entire repayment period for Chinese loans generally ranges from 10 to 15 years, which ultimately increases the amount of installments and increases the overall repayment pressure.
However, one positive aspect of Chinese loans is that their interest rates, which range from two percent to 2.15 percent with service charges, are fixed.
Other lending institutions, including the World Bank and ADB, have comparatively flexible terms, but their interest rates, which typically range from two percent to four percent, fluctuate according to the secured overnight financing rate (SOFR).
But they offer longer repayment periods, usually 30 to 40 years.