Definition of Demand note:
A demand note is a loan with no fixed term or repayment schedule. It can be recalled upon the lender's request, assuming the notice required by the provisions of the loan are met. Given its relative informality, a demand loan (or note) is most common among family, friends, and close business associates. However, banks can also issue demand notes to long-standing customers who have sound credit profiles.
Promissory note from a borrower to a lender, with a specific due date or payable whenever lender demands repayment. In contrast to a mortgage loan, a demand note does not require a show-cause notice to be given to a delinquent borrower.
A demand loan can be made to a family member, friend or business associate as a favor to that person who wishes to have some sort of financing without being bound by formalities and legal implications. The loan is unsecured, typically modest in size, does not have a fixed maturity date, and is not subject to a principal and interest repayment schedule. The borrower enjoys these benefits, but they also must be prepared to return the loan "on demand" by the lender. In other words, for these flexible terms the lender retains the right to call in the loan at any time just as long as the advance notification is reasonable.
How to use Demand note in a sentence?
- While not common, banks may also issue a demand note to certain customers with good relationships and a history of creditworthiness.
- When he received the demand note that said the bulk of the repayment was due in just thirty days, Cole thought he had been mislead by the bank regarding the terms of the loan agreement.
- During the process of buying a house we received a demand note from our bank as a promissory notice.
- Due to their flexible nature, demand notes are common in informal lending between family and friends and often involve relatively small sums.
- A demand note is an informal loan without a fixed term or repayment schedule, that can be called in (demanded) at any point given requisite notice to the borrower.
- The demand note required me to pay it back by that certain date, or I am sure we would have some problems.
Meaning of Demand note & Demand note Definition