A loan extended by a bank for a specific purpose. Lines of credit and revolving credit agreements involve by contrast loans that can be used for various purposes.
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A loan for a specific purpose. For example, a mortgage is a transaction loan because it is used to buy a piece of property, a fact both the lender and the borrower know when they begin the process. A transaction loan contrasts with a line of credit, which may be used for any number of purposes within a broad range.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved