Loan note
Loan Note
A contract stating the terms of a loan, such as the principal, the interest rate, and the payment schedule. A loan note states the rights and obligations of both the lender and the borrower. If one party does not fulfill his/her obligations, the other may sue for redress.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
Loan note.
A loan note is a promissory agreement describing the terms of a loan and committing the person or institution borrowing the money to live up to those terms.
For example, a mortgage loan note states the principal balance, the interest rate, the discount points, a payment schedule and due date, and any potential penalties for violating the repayment terms.
When the required repayment has been made, the agreement between the parties ends.
Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.