Legal Definitions - accommodation loan

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.