call loan

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.

Investopedia Commentary

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

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Margin Trading Tutorial

See also: Call Loan Rate, Interest Rate, Loan, Margin

Also spelled: callable loan

call loan

A loan that may be terminated at any time by either party. For investors, a call loan means bank loans to stockbrokers for the purpose of carrying customer margin borrowing, using securities as collateral. The rate of interest, similar to that on other high-quality short-term loans, varies over time. Brokerage firms usually charge customers the rate on call loans plus an additional 1% or so depending on the amount borrowed. Also called broker call loan. See also broker's loan.