What is a Variable Rate or Floating Rate Loan?
A Variable-rate or Floating-rate loan is a loan in which the interest rate varies over the loan term. This is different from a fixed rate loan that has the same interest rate throughout the loan term. The base interest rate is the prime rate, which is based on the Central Bank’s overnight rate. And then… Read more »
What is a Demand Loan?
A demand loan is a loan in which the Lender can require the full repayment of the loan by the Borrower at any time during the loan term. A demand loan can be used in many different types of loans and loan structures. It is outlined in a promissory note,… Read more »
Balloon Payment in Business Loans
In a loan that has a balloon payment, the terms of the loan require the Borrower to pay a larger final payment than previous smaller payments to settle the outstanding loan. This is called a balloon payment. It is normally the loan Principal that is paid in the balloon payment…. Read more »