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Call Loan

What is 'Call Loan'

A loan provided to a brokerage firm and used to finance margin accounts. The interest rate on a call loan is calculated daily. The resulting interest rate is referred to as the call loan rate.

Explaining 'Call Loan'

Call loans use securities as collateral for the loan. It is important to note that a call loan can be canceled at any time.

Call Loan FAQ

What does it mean to call in a loan?

A call loan can be demanded to be repaid at any time by the lender. It is "callable" just like in a callable bond. The key difference is it's the lender that has the power to call in the loan repayment in a call loan, while it's the borrower for a callable bond.

Can a mortgage company call in a loan?

The bank can “call” the loan and the full payment of the remainder of the loan can be demanded immediately. Although this practice is legal if disclosed in the terms of the loan, a bank likely will never call the loan if you meet the loan's terms. For example, one or more late payments might trigger a call on the loan.

What is a call rate?

This is the interest rate charged on call loans.

Which loan is cheaper as per interest rate?

Current Personal Loan Interest Rates in India Lenders Interest Rate* (p.a.)Loan Amount (Rs.) Home Credit 24% onwards Up to 2.4 lakh HSBC Bank 10.50% onwards Up to 30 lakh ICICI Bank 11.25% onwards 50,000-20 lakhs IDBI Bank 12% onwards 25,000-5 lakhs

How many times can you get a loan?

You can get a personal loan 1-3 times from the same lender at the same time, in most cases, depending on the lender. There is however no limit to the number of personal loans you can have at once in total across multiple lenders.

How do I stop a bank loan call?

Do Not Call Registry To register against Commercial Messages or Calls, call 1909 (toll free) from your landline or mobile and select your preferences. To register for select categories or partial registration, send SMS by typing START followed by the preference to 1909. To De-register, call 1909 (toll free) or send SMS: STOP DND to 1909.

Further Reading


The call loan market in the US financial system prior to the Federal Reserve System
papers.ssrn.com [PDF]
… Panic of 1907. “Each bank that has loaned money on call assumes that, in case of need, it can strengthen its reserve by calling such loans; but it fails to consider that, generally, when a loan is called the borrower is obliged …

Financial markets and economic growthFinancial markets and economic growth
onlinelibrary.wiley.com [PDF]
… Panic of 1907. “Each bank that has loaned money on call assumes that, in case of need, it can strengthen its reserve by calling such loans; but it fails to consider that, generally, when a loan is called the borrower is obliged …

The unholy trinity of financial contagionThe unholy trinity of financial contagion
www.aeaweb.org [PDF]
… Panic of 1907. “Each bank that has loaned money on call assumes that, in case of need, it can strengthen its reserve by calling such loans; but it fails to consider that, generally, when a loan is called the borrower is obliged …

What is international financial contagion?What is international financial contagion?
onlinelibrary.wiley.com [PDF]
… Panic of 1907. “Each bank that has loaned money on call assumes that, in case of need, it can strengthen its reserve by calling such loans; but it fails to consider that, generally, when a loan is called the borrower is obliged …

The effect of refinancing costs and market imperfections on the optimal call strategy and the pricing of debt contractsThe effect of refinancing costs and market imperfections on the optimal call strategy and the pricing of debt contracts
onlinelibrary.wiley.com [PDF]
… Panic of 1907. “Each bank that has loaned money on call assumes that, in case of need, it can strengthen its reserve by calling such loans; but it fails to consider that, generally, when a loan is called the borrower is obliged …

Cash setting, the call loan rate, and the liquidity effect in CanadaCash setting, the call loan rate, and the liquidity effect in Canada
www.jstor.org [PDF]
… Panic of 1907. “Each bank that has loaned money on call assumes that, in case of need, it can strengthen its reserve by calling such loans; but it fails to consider that, generally, when a loan is called the borrower is obliged …

Daily and intradaily tests of European put-call parityDaily and intradaily tests of European put-call parity
www.jstor.org [PDF]
… Panic of 1907. “Each bank that has loaned money on call assumes that, in case of need, it can strengthen its reserve by calling such loans; but it fails to consider that, generally, when a loan is called the borrower is obliged …

Margin purchases, brokers' loans and the bull market of the twentiesMargin purchases, brokers' loans and the bull market of the twenties
www.jstor.org [PDF]
… Panic of 1907. “Each bank that has loaned money on call assumes that, in case of need, it can strengthen its reserve by calling such loans; but it fails to consider that, generally, when a loan is called the borrower is obliged …



Q&A About Call Loan


How long does a call money loan last?

A call money loan lasts for one to fourteen days or overnight to a fortnight.

Where do banks get cash reserves ?

Banks get cash reserves from customers when they deposit money into checking accounts . They also borrow from each other through the federal

Who provides the loan?

The brokerages provide the loans.

What does a call loan use as collateral?

Securities are used as collateral for the loans.

What is call money?

Call money is the minimum short-term loan repayable on demand.

Who uses call money loans?

Commercial banks use them for maintaining cash reserve ratio.

What is a call loan?

A call loan is a loan provided to a brokerage firm and used to finance margin accounts.

Why do banks need cash reserves ?

Banks need cash reserves because if there were no cash reserves then people would take out all their deposits at once and put it into another bank . This would cause all banks' assets (deposits) to fall by exactly the amount that its liabilities fell by , leaving no net change in total assets . If this happened , then there would be no way for banks to make new loans ; since new deposits are needed before new lending can occur , without such lending , there will be no economic growth .

What are the different types of call loans?

There are two types of call loans, commercial and interbank.

When can you cancel a call loan?

At any time.

What is the difference between commercial and interbank loans?

The schedule for payment of interest and principal in an interbank loan is not fixed whereas it is fixed in a commercial loan. Interbank loans are riskier than other forms of loans as they can be called at any time. Commercial bank's lend these funds to brokers who maintain margin accounts with them so that they can trade stocks on margin (i.e., borrow more from their brokerage firm). Brokers use this funding to cover their initial margin requirement when trading stock on margin, which allows them to buy more stock than they otherwise could afford using only their own capital."

How do you calculate interest on a call loan?

Interest on a call loan is calculated daily, resulting in an interest rate called the "call loan rate."

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