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Simple English definitions for legal terms
accommodation loan
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A quick definition of accommodation loan:
An accommodation loan is a type of loan where the lender doesn't receive anything in return. It's like lending something to a friend without expecting them to pay you back. There are many other types of loans, like a mortgage loan where you borrow money to buy a house, or a student loan where you borrow money to pay for college. Loans usually have to be paid back with interest, which is like a fee for borrowing the money.A more thorough explanation:
An accommodation 5loan is a type of loan where the lender does not receive any consideration in return. In other words, the lender is lending money without expecting anything in return.
For example, if a person with good credit history agrees to co-sign a loan for a friend who has a poor credit history, the loan is considered an accommodation loan. The co-signer is not receiving any benefit from the loan, but is simply helping their friend get approved for the loan.
Another example of an accommodation loan is when a business owner agrees to lend money to a friend or family member without charging any interest or fees. The business owner is not expecting to make a profit from the loan, but is simply helping out someone in need.