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indirect loan


Definition

Loan deal in which the actual lender may not be known to the borrower. For example, most automobile purchase loans are not financed by the car dealers (where the car buyers fill out and submit the loan applications) but by a third party. This party (usually a finance company, called the loan owner) is the one that approves the loan terms, receives the loan payments installments from the car buyers, and sues defaulting borrowers.


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