A loan that can be called by the lender (and hence falls due) or paid off by the borrower at any point in time over its tenure. The lender has the right, as defined in the loan’s terms and conditions, to demand repayment at any time. In its concept, a call loan is similar to a callable bond, with a major difference: in a call loan, the lender enjoys the right to call, while in a callable bond, the issuer (i.e., the borrower) has the right to demand repayment. A call loan is a type of short-term loan that the borrower will be obliged to repay immediately at the lender’s request.
An example of a call loan is a broker call loan that is often used to fund margin accounts.
