DEMAND LOAN Meaning and
Definition
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A demand loan is a type of loan that allows borrowers to request funds from a lender at their discretion or when they require immediate funding. Unlike traditional loans, where borrowers receive the entire loan amount upfront and are required to repay it in fixed installments over a specific period, a demand loan offers borrowers the flexibility to access the funds on an as-needed basis.
The key characteristic of a demand loan is that the lender can demand repayment of the loan amount at any time, usually without prior notice or a fixed repayment schedule. The lender may have the right to request full repayment if they feel the borrower is unable to meet the loan terms, or if the borrower's financial situation significantly changes. As such, the interest on a demand loan is generally calculated on a daily or monthly basis, based on the outstanding loan balance.
Demand loans are commonly used in business and commercial financing, as they provide companies with a flexible credit option to manage cash flow fluctuations or cover unexpected expenses. Additionally, demand loans are often utilized by individuals for personal purposes such as short-term financial needs or emergency situations.
Overall, a demand loan grants borrowers access to funds at their request, with the understanding that the lender can demand repayment at any time. It offers flexibility and liquidity, but also entails the potential risk of immediate repayment if the lender exercises their right to demand the loan.
Common Misspellings for DEMAND LOAN
- semand loan
- xemand loan
- cemand loan
- femand loan
- remand loan
- eemand loan
- dwmand loan
- dsmand loan
- ddmand loan
- drmand loan
- d4mand loan
- d3mand loan
- denand loan
- dekand loan
- dejand loan
- demznd loan
- demsnd loan
- demwnd loan
- demqnd loan
- demandloan
Etymology of DEMAND LOAN
The word "demand loan" originated from the Old French word "demande", which means a request or a claim. The term "loan" comes from the Middle English word "lon", which means a grant or a sum lent. The combination of these words reflects the nature of this type of loan as one that is requested or claimed by the borrower and must be paid back upon demand by the lender.
Similar spelling words for DEMAND LOAN
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