Is bank loan a current liability?

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1247662

2026-05-01 06:50

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That depends on the term of the loan. Let's define Current Liability and Long-Term Liability

A current liability is any liability that will be paid off within one year (or less) or one accounting cycle. A bank loan, if is financed for One Year or less, would be classified as a Current Liability.

A Long-Term Liability is anything OVER a year. So if the bank loan is financed for more than one year, it will then be classified as a Long-Term Liability.

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