What is a Call Loan?
A call loan is a type of loan which is repayable on demand, rather than being repaid on a fixed schedule. Call loans are most commonly seen in brokerage houses, although they can appear in other contexts as well. While they can be a flexible and powerful tool for funding various endeavors, they can also be very dangerous, because the borrower is exposed to the risk of having the loan “called,” meaning that the lender demands the payment in full at any time. One classic use of the call loan is in margin trading. When people establish an account with a stockbroker, they can set up a margin account, which allows them to borrow money from the broker for the purpose of buying stocks, a practice known as trading on the margin. The money is loaned in the form of a call loan so that the broker can call the loan if the value of the stock falls abruptly, ensuring that the broker gets its money back. In the case of margin trading, if the customer is unable to repay the loan when requested, the br
