Define: Discount Loan

UK Accounting Glossary

Definition: Discount Loan



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Full Definition of Discount Loan


A discount loan is a loan that does not require the payment of interest or any other charges; rather, a discount loan deducts the interest and/or other charges from the face amount of the loan when it is given out. That way, the person taking out the discount loan receives less. For example, a discount loan of $1,000 might yield only $930 for the borrower to use. The other $70 would be interest and/or other charges. When it comes time to repay the discount loan, the borrower must pay the full face amount; in our example, this is $1,000. Generally, only a short-term loan can be offered as a discount loan. It is usually paid back in one lump sum.


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Discount Loan. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/discount-loan/ (accessed: February 21, 2020).
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Discount Loan. PayrollHeaven.com. Retrieved February 21, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/discount-loan/

Definition Sources


Definitions for Discount Loan are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • BusinessDictionary.com
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 9th February 2020.