demand loan

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Related to Demand Loans: Cash credit, lender, Term loan, Short Term Loans

Demand loan

A loan which can be called by the lender at any time and carries no set maturity date.

Demand Loan

A loan that must be paid on demand from the lender. Demand loans are often used to fund margin accounts; alternatively, they are common for personal loans with no set maturity. Demand loans often require collateral and are also called call loans. See also: Margin call.

demand loan

A loan due at any time the lender decides to request payment.

demand loan

A loan that states it is due upon demand, rather than on any certain date or upon the happening of a certain event.For purposes of calculating the statute of limitations within which to sue on a demand loan,it is treated as if demand were made and default occurred on the very first day the loan was made,even if that did not truly happen in fact.
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A demand loan is a below-market loan if interest is payable at a rate less than the AFR, while a term loan is a below-market loan if the amount loaned exceeds the present value of all payments due under the loan using the appropriate AFR for the month the loan is made.
In any event, the Service, in a Revenue Ruling published in 1973, extended the holding of the Blackburn to gift demand loans. (20) In the case of a demand loan, the value of the interest-free repayment obligation cannot be ascertained at the time the loan is made, because the repayment date is not known in advance, nor is it pegged to predictable external events.
A split-dollar term loan is any loan that is not a demand loan (e.g., a loan payable in full in 15 years).
The $10,000 de minimis rule for term loans is similar to the one for demand loans; however, once a term loan has exceeded $10,000, it continues to be subject to the below-market loan rules, even if the balance later falls below $10,000.
Regardless of whether a term has been specified, all gift loans are treated as demand loans for income tax purposes.
(2) Is the loan a demand loan or a term loan (including loans with indefinite maturities)?
The applicable Federal rate for demand loans is the short-term rate in effect under IRC Sec.
For demand loans with principal amounts that fluctuate during the year, the minimum interest rate is based on a month-by-month computation using the short-term applicable federal rate issued for each month.
A demand loan is usually a short-term loan with no set repayment schedule.
Many owners of closely held businesses have fluctuating demand loans to or from their businesses and accordingly use the short-term or demand-loan rate that is specified by the IRS.
The centre will consider three major types of loans - demand loans, term loans and equity investments.