Business, Legal & Accounting Glossary
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.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Discount Loan are sourced/syndicated and enhanced from:
This glossary post was last updated: 9th February, 2020 | 667 Views.