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LSDefine
Simple English definitions for legal terms
demand loan
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A quick definition of demand loan:
A demand loan is a type of loan where the lender can ask for the money back at any time, usually with a day's notice. It's different from a term loan, which has a set due date. When you borrow money, you have to pay it back with interest. There are many types of loans, like a mortgage loan for buying a house or a consumer loan for personal expenses. Some loans are secured by property or securities, while others are unsecured and based on the borrower's promise to pay.A more thorough explanation:
A demand loan is a type of loan where the lender can ask for repayment at any time, usually with 24 hours' notice, as there is no fixed maturity date. This type of loan is also known as a call loan.
For example, if a business takes out a demand loan from a bank, the bank can ask for repayment at any time, even before the loan's due date. This type of loan is usually given to businesses that need quick access to funds for short-term needs.