What is a Callable Loan?
Often referred to as a call loan or a demand loan, the callable loan is simply a financial transaction in which the lender retains the right of demanding repayment of the full value of the loan. The lender’s demand usually includes the balance due, plus applicable interest. When the lender chooses to exercise his or her right of demand on a callable loan, the borrower usually has a short period of time in which to comply with the demand. Callable loans have a couple of important advantages. One of the more attractive features is that call loans tend to be issued at a rate of interest that is below the interest rte that is normally applied in standard bank loans. While the difference is usually no more than a percentage point, this can translate into a significant amount of savings for the borrower. At the same time, the callable loan does carry an interest rate that is higher than federal funds rates or the rates on Treasury bill notes. Second, the borrower can pay off a callable loan
Often referred to as a call loan or a demand loan, the callable loan is simply a financial transaction in which the lender retains the right of demanding repayment of the full value of the loan. The lender’s demand usually includes the balance due, plus applicable interest. When the lender chooses to exercise his or her right of demand on a callable loan, the borrower usually has a short period of time in which to comply with the demand. Callable loans have a couple of important advantages. One of the more attractive features is that call loans tend to be issued at a rate of interest that is below the interest rte that is normally applied in standard bank loans. While the difference is usually no more than a percentage point, this can translate into a significant amount of savings for the borrower. At the same time, the callable loan does carry an interest rate that is higher than federal funds rates or the rates on Treasury bill notes. Second, the borrower can pay off a callable loa
” Often referred to as a call loan or a demand loan, the callable loan is simply a financial transaction in which the lender retains the right of demanding repayment of the full value of the loan. The lender’s demand usually includes the balance due, plus applicable interest. When the lender chooses to exercise his or her right of demand on a callable loan, the borrower usually has a short period of time in which to comply with the demand. . Callable loans have a couple of important advantages. One of the more attractive features is that call loans tend to be issued at a rate of interest that is below the interest rte that is normally applied in standard bank loans.
