flat loan

Flat Loan

A loan without interest. Investors who borrow securities for short sales often provide flat loans to lenders as collateral for borrowed securities. Personal loans are also commonly flat loans. In Islamic finance, flat loans are the only loans directly allowed.

flat loan

A loan without interest to the lender. A firm lending securities for a short sale is often compensated by the borrowing firm with a flat loan. Thus, the lending firm has use of the funds without charge.