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18 - Banking -- Demand loans and Term Loans

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Banking -- Demand loans and Term Loans 3 -- Demand Loans Demand loans are short term loans (typically no more than 180 days) that are atypical in that they do not have fixed dates for repayment and carry a floating interest rate which varies according to the prime rate. They can be "called" for repayment by the lending institution at any time. Demand loans may be unsecured or secured. 4 -- Term Loans (Interest-only Loans) It is a loan in which, for a set term, the borrower pays only the interest on the principal balance, with the principal balance unchanged. At the end of the interest-only term the borrower may enter an interest-only mortgage, pay the principal, or (with some lenders) convert the loan to a principal and interest payment (or amortized) loan at his/her option. This kind of Interest-only loans is not available in Canada. http://en.wikipedia.org/wiki/Loan http://en.wikipedia.org/wiki/Interest-only_loan
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