Are Loans Considered Liquid Assets?
A liquid asset is considered an investment that can be readily sold. Cash is a prime example as it can be instantly accessed so its market value will remain unchanged from the beginning and end of the transaction. Other examples that are considered liquid assets are:
- Savings accounts
- Short-term deposits
To answer the question are loans considered liquid assets? Loans are not considered liquid assets. A loan on its own is considered a liability as it is an item that you are obligated to repay. You may use loans to obtain assets such as a vehicle or house, but these are investments that are not able to be readily exchanged for cash.
After the initial lump sum deposit of a personal loan, you may consider the available cash from the loan, a liquid asset.
In summary, loans are not considered liquid assets as they are a liability not an asset.