Legal Definitions - below-market loan

A below-market loan is a type of loan where the interest rate charged is lower than the market rate. This means that the borrower pays less interest than they would on a typical loan.

For example, if a bank offers a loan with an interest rate of 5%, but a below-market loan has an interest rate of 2%, the borrower would pay less interest on the below-market loan.

Below-market loans are often used for charitable purposes, such as providing loans to low-income individuals or non-profit organizations.

Another example of a below-market loan is when a family member lends money to another family member without charging interest or with a lower interest rate than what a bank would charge.

Overall, below-market loans are a way to provide financial assistance to those who may not qualify for traditional loans or who need help with financing.