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A demand note is a promissory note containing terms that allow the holder to legally request for full repayment of the loan.
The industry term for this request for full repayment is to call in the loan.
For such terms to be triggered, there are usually specific events that must occur which are clearly stated in the legal document.
However, some loan arrangements do give the lender the legal rights to demand full payment for any reason. But doing so with no justified reason is seldom (if ever) observed.
This is because of the public backlash that the lender might incur for such conduct.
Who would dare to borrow from such lenders in future if they have demonstrated that they can demand full repayment as and when they please?
Conversely, a term note is a promissory note that does not require repayment until the time that is expressly specified in the document.